I live in Cambridge. I have recently been hit with the 100% premium on council tax for second homes. Two questions:
I’m thinking of renting the second home to a tenant. I’d draw up a proper tenancy agreement, specifying that the tenant is responsible for council tax. I’d send the tenancy agreement to the council. Would the second home premium then no longer be payable?
As well as paying council tax, the tenant would also take over payment for utilities, register on the electoral roll and with a local GP, and change driving licence, bank, credit card addresses to the rental property. So far, so good. However, I would be asking only a peppercorn rent of £100 per month from the tenant, who is a friend. How likely is it that the council would refuse to lift the second home premium on the council tax, citing the far below market value rent?
I agree it’s none of the council’s business. But I’ll be trying to convert a second home into a rental home, so the council might take a keen interest since they’d lose the 100% council tax premium!
The peppercorn rent is for a friend, but I take your point in general.
You are obliged to tell them there is a tenant
We were refurbing and paid 200% on an empty home
The tenant moved in and I redacted all the data they don’t require
The tenants also don’t like sharing their data
At the end of the day you need the tenants permission to share data . Some of them decline
Our local authority ask if there are learning disabilities and are they living as partners etc
Tenants don’t tell me , I find out when I see them together
There is a lot of stuff that really is none of their business
Business and pleasure don’t go together
There are enough posts in here of many who rented to their friend and the consequences . Read the posts of these nightmares .
Renting is a business .
You don’t defecate on your own doorstep
I have had many ‘friends ‘ ask to rent , neighbours who’ve seen us renovate
I’ve never done it . It’s the worst thing you can do
A rental relationship needs to be a business . Once you cross that boundary you won’t have a friendship and things may sour .
The experienced on here will tell you not to do it
If the “tenant” is not actually living there then its council tax fraud, which is a criminal offence carrying a prison sentence.
As someone also paying this unfair tax on a second home I sympathise, but I am not aware of any safe means of avoiding it other than devorcing your partner and each declaring a different home as your PPR.
The tenant is real and will be actually living there, if we go ahead with this idea. That’s why in my question I said the tenant would, “take over payment for utilities, register on the electoral roll and with a local GP, and change driving licence, bank, credit card addresses to the rental property”.
You will need a gas certificate EICR EPC
If your roc is below c you will be looking at a £15 k outlay for energy efficient measures under MEES
You really need to consider charging market rent
I say this with respect but you don’t appear understand what upcoming legislation is going to cost landlords
Thanks again for sharing the benefits of your experience.
I’ve only just started exploring this idea and was initially looking at the council tax implications. It might be that it’s untenable, because of the expenses you’ve mentioned.
Is it right that existing tenancies will need to reach the new EPC minimum of C by 2030?
Given all the forthcoming changes with the Renters Rights Bill, I wouldnt have thought it made sense to do this. You will also have to pay CGT when you sell the property.
Just to reinforce that advice, I know it sounds harsh but treating it as business could actually save your friendship. Think twice and think again before going down the pure friendship route. Here speaks the voice of repeated bitter experience…
Hi,
I recently let my son live in a property owned by me.
He paid the bills, and the Council tax as normal and got a discount for single person.
I didn’t charge rent and I didn’t have any rental agreement with him either.
No need to follow any legislation.
He’s now moved on and I’ve rented the house out, the tenant pays Council Tax as normal.
If you have a spare house and your friend lives there you don’t need a rental agreement and you don’t need to do anything regarding the government letting policies.
However you do need a lot of trust in your friend. There are questions like if the house needs a new boiler will you be paying for it or not.
Maintenance still happens.
Is this arrangement going to cost you more. If there is any rental agreement whatsoever you are liable for certain things that cost. Insurance, gas certificates, gutters, heating system. Etc
Its not quite as straightforward as you say Chris50. If a home owner didnt charge any rent, they would still have all the repairing and health and safety obligations of a landlord. Overcrowding regulations would still apply. The occupant would likely have an implied licence to occupy and therefore a gas safety certificate would be required. There may be tax, insurance and mortgage implications and possibly local licensing implications. Perhaps the biggest issue is that any money spent on the property by the occupant that would normally be incurred by the owner, such as routine maintenance costs, may be considered “monies worth” by a court and therefore payment in lieu of rent. This could make the occupant a tenant and if the amount is high enough, an assured tenant.
Just charge a market rent and give a tenancy agreement, If you charge a small amount and want them out in the future they may dig heels in . Do no favours or you will end up being stitched up