Local government finance circular 6/2026: council tax on second and long-term empty homes guidance

3. Overview of powers

In relation to Council Tax charges for second and empty homes, the Regulations provide local authorities with the power to vary that rate, including increasing or reducing the premium, applying no premium, or applying a discount, and to apply different approaches for different cases, classes of dwelling or areas.

Local authorities also have discretion to vary the council tax charged for different circumstances, and/or to apply discounts or increases in all or part of their areas, as they consider appropriate. This flexibility recognises that different pressures and factors may affect different areas. This can be done by using either postcode boundaries, council wards or data-zones. 

Housing Need and Demand Assessments and Local Housing Strategies (LHS) may inform development of Council Tax charging policies for second and empty homes. Local authorities may use these to consider the effect of second home ownership and empty properties in their areas, and whether increased levels of Council Tax would help to address any problems arising from these types of properties.

The purpose of this guidance is to support the lawful, proportionate exercise of local authority discretion following changes to the statutory framework governing Council Tax variations for unoccupied dwellings. 

The amendment made by the Housing (Scotland) Act 2025 removed the pre-existing statutory upper limit on the level of variation that may be applied. This guidance is intended to set out considerations which local authorities should have due regard to as they exercise their discretionary powers.

More information about factors that may inform policies and the use of discretion are set out in this guidance.