Vacant Homes Tax Update

An Overview of Recent Changes and Updates to the Vacant Homes Tax Policy.

What is vacant homes tax?

Vacant Homes Tax (VHT) was introduced in the Finance Act 2022 and applies to residential properties that were in use as a dwelling for less than 30 days in a 12-month period. The first chargeable period is the 12 months to 31 October 2023.

VHT is charged:
  • Annually
  • At three times the base Local Property Tax (LPT) rate (the rate excluding any local adjustment factor) on the value of habitable residential properties.
  • In addition to LPT.

Return filing date – 7th November 2023
Owners of vacant properties are required to self-assess their liability to VHT by looking back over the previous chargeable period to determine if their property was in use as a dwelling for less than 30 days in that chargeable period, i.e. by 7 November.

Exemptions and exclusions

Certain residential properties are outside of the scope of VHT:
  • properties that are exempt from VHT;
  • properties that are genuinely tenanted for a period of at least 30 days in the chargeable period; and 
  • properties which changed ownership during the chargeable period either by way of gift, sale, inheritance or a compulsory purchase.
In addition, there are eight scenarios where an exemption from the tax can be claimed, even where a property is used for less than 30 days in a chargeable period, including where the property was being actively marketed for sale or rent, or where is was unoccupied due to illness or death of the owner. In these situations, the exemption must be claimed on the VHT return.

If you have any queries please reach out to the team at PKF.