Council Tax and Utilities During Void Periods — Deductible?
Yes, if you intend to re-let: council tax, utilities, insurance, repairs and marketing while the property is empty. The empty-homes premium, losses and a worked example.
The short answer
Yes — if you intend to re-let. Council tax, gas, electricity, water and standing charges you pay while a rental property is empty between tenancies are allowable, as are repairs and marketing during the void. They stop being allowable the day the property stops being part of your rental business — for example when you move in or put it up for sale with no intention of letting again.
Void periods are part of letting. HMRC does not require a tenant to be in place for a cost to be deductible; it requires the expense to be incurred for the purposes of the property business. An empty property you are actively trying to re-let is still in the business.
What you can claim during a void
| Cost during void | Treatment |
|---|---|
| Council tax (once any empty-property exemption ends) | Allowable |
| Gas, electricity, water — usage and standing charges | Allowable |
| Insurance, ground rent, service charges continuing through the void | Allowable |
| Cleaning, redecorating, repairs between tenancies | Allowable |
| Advertising, agent tenant-find fees, referencing | Allowable |
| Mortgage interest during the void | Section 24 credit continues (finance cost of the business) |
| Costs after you decide to sell (no re-let intended) | Not allowable against income — some sale costs go to CGT |
| Costs while you or family live there | Not allowable — private use |
Council tax and empty-property premiums
Many councils charge a premium on homes empty for 12 months or more (100–300%). The premium is still a cost of the property business if the property is genuinely between lets — but a void that long invites HMRC to ask whether letting was still the intention. Keep the marketing evidence.
Losses in a void-heavy year
If void costs push the property business into a loss, the loss carries forward against future property profits (all your UK properties are one business). It cannot be set against salary.
Worked example
A three-month void in 2026/27 costs: council tax £540, utilities £190, redecoration £900, tenant-find £420 — £2,050 allowable.
| Deducting £2,050 in 2026/27 | Effect |
|---|---|
| Basic-rate landlord (20%) | £410 less tax |
| Higher-rate landlord (40%) | £820 less tax |
| Additional-rate (45%) | £922 less tax |
| From April 2027 (property rates 22/42/47%) | slightly more — the deduction is worth more as rates rise |
What to keep
The invoice describing the work, proof of payment, and — for anything near the repair/improvement line — a sentence in your records saying what was there before. HMRC enquiries into landlord expenses turn on that single fact. Digital copies satisfy MTD’s record-keeping rules.
Where it goes under Making Tax Digital
If you are inside MTD for Income Tax (mandated from April 2026 above £50,000 gross), the cost belongs in your quarterly update under the matching expense category, in the quarter you paid it (cash basis is the default for landlords). Get the category right now — the final declaration only tidies totals, it does not re-classify. Check whether MTD applies to you.
HMRC PIM2010 / PIM2510 (expenses incurred for the purposes of the property business; void periods) · gov.uk council tax empty-homes premium guidance · rates from our verified 2026/27 dataset. Checked 31 Aug 2026.
Quick answers
Yes, while the property is between tenancies and you intend to re-let. Once it leaves the rental business — you move in, or market it for sale only — council tax stops being deductible.
Yes. Gas, electricity, water and standing charges paid while the property is empty and being re-let are allowable expenses.
Property losses carry forward against future profits of the same property business. They cannot be set against employment income.
Box 24 (rent, rates, insurance) for council tax and utilities; Box 25 for repairs; Box 27 for agent fees.