Our last article set out the new premium powers in England and Wales. This article looks beyond second homes, at the full range of property the premium covers and the scale of the revenue involved.

Beyond second homes

The full premium rate opportunity

The debate around council tax premiums tends to focus on second homes. This is understandable given the visibility of the issue in coastal and rural communities. But second homes are only one category of property liable for a premium. For councils serious about maximising revenue collection, the full picture is considerably broader.

The premium rate categories

  1. Second homes. Properties that are substantially furnished and not anyone’s sole or main residence. From April 2025, councils can charge a premium of up to 100%, effectively doubling the standard council tax bill.
  2. Long-term empty properties (1–5 years). Unoccupied and substantially unfurnished for between one and five years. Councils can charge a premium of up to 100% (a total bill of 200%). Prior to April 2024, the threshold was two years, lowering it to one year, which significantly expanded the pool of liable properties.
  3. Long-term empty properties (5–10 years). A premium of up to 200% (a total bill of 300%).
  4. Long-term empty properties (10+ years). A premium of up to 300% (a total bill of 400%).

In Wales, a maximum of 300% applies across both second homes and long-term empty properties, with councils setting their own rate up to that maximum.

Why empty homes present a different identification challenge

Second homes and long-term empty properties require different analytical approaches, even though both fall under the same premium regime. A second home is, by definition, occupied periodically. The challenge is establishing whether the occupancy pattern is consistent with the owner’s claimed primary residence elsewhere. A long-term empty property presents a different problem: the challenge is verifying that the property genuinely remains unoccupied and unfurnished, and that the claimed duration of vacancy is accurate.

Both categories are susceptible to avoidance. For empty homes, common patterns include brief periods of occupation designed to reset the vacancy clock, claims of ongoing major repair works that exceed what the property’s condition justifies, and administrative errors in councils’ own records that mean properties are classified at lower premium bands than they should be.

The empty homes premium is not a niche issue. There were 264,884 long-term vacant dwellings in England on 7 October 2024, defined as empty and substantially unfurnished for at least six months. Of the 296 billing authorities in England, 292 charged an empty homes premium in 2023/24. That is a substantial and largely static pool of properties, many of which will have been on councils’ books for years, where the premium liability is clear in principle but the accuracy of the underlying data is not always verified.

The extension of the threshold to one year in April 2024 added a significant number of further properties to the liable pool. For many councils, the question has shifted from whether those properties are being charged to whether the charge is being applied correctly and at the right rate.

“Second homes get most of the attention, but the empty homes opportunity is just as significant and, in some ways, harder to get right. With a second home, you’re asking: does this person really live somewhere else? The data signals that answer that are well-established. We’re looking at credit bureau activity, financial footprint, electoral registration. With an empty property, you’re asking a different question: is this place genuinely unoccupied, and for how long? That requires different evidence, such as property condition data, utility signals, occupancy patterns. Councils that treat both challenges with the same approach will miss things. The ones that get the most out of the new premium powers are those applying the right analytical lens to each category.”

Gareth Chen-Rees – Director, Local Government and Data, Infoshare+

The financial opportunity for councils

It’s no secret that local government finances are under severe strain. Seven local authorities in England issued Section 114 notices between 2018 and 2023, compared to none in the preceding 18 years, and the LGA estimates councils face an £8.4bn funding gap by 2028 just to keep services standing still. A survey by the Local Government Information Unit found that half of councils believed they could issue a Section 114 notice within five years. Revenues teams are being asked to do more with less, and the pressure to find new income streams without raising headline council tax rates is intense.

The council tax premium opportunity doesn’t solve everything. But for many authorities, particularly those in areas with high concentrations of second homes and short lets, it represents a material, immediately addressable revenue gap. The question isn’t whether the money is there. It’s whether councils have the tools to find it.

Based on an analysis of seven councils where Infoshare+ has conducted Premium Rate Avoidance reviews this year, several major things stand out:

  • The average council is correctly identifying only 68% of properties with a potential premium rate liability
  • The missing revenue from these unidentified premium-liable properties can range from an average of a few hundred thousand pounds for smaller councils, all the way to over £5 million for some of the biggest or those in heavy tourist areas. And that’s revenue per year.
  • In some high-risk areas (coastal, tourist, AONB), we have found a massive 2.6% of all Full Charge and Single Person Discount properties were Second or Empty Homes.
  • The average return on investment from a targeted PRAV review is approximately 30x the cost of the service

“While the scale of the gap between what councils are aware of and what’s happening seems shocking, councils simply don’t have access to the data required, nor the time and resource, to tackle this kind of emerging risk. With the world economic situation showing no immediate signs of improving, it’s natural that more people will attempt to claw back cash where they can. It’s vital that councils stay on top of ever greater numbers of people avoiding paying the correct council tax, particularly in the cases of second and empty homes where additional premiums are more easily affordable.”

Dean Morgan – Data Analyst, Infoshare+

The opportunity is clear. Acting on it depends on identifying the right properties, which is the subject of the next article.

The full report, The hidden housing economy: how second homes and short lets are reshaping council tax revenue, sets out the full picture. Download the full report.

If you would like to talk through what it means for your authority, contact us.