Class L – Repossessed properties

A Class L exemption applies when a property has been formally repossessed by a mortgage lender (such as a bank or building society) through legal proceedings.

This exemption recognises that once repossession occurs, the previous resident or owner is no longer liable for Council Tax, and the property is typically unoccupied during the sale or disposal process.

A property qualifies for Class L when all the following apply:

• The property is unoccupied

The dwelling must be empty following repossession.

If it becomes occupied by anyone (for example, a tenant or property guardian), the exemption cannot apply.

A mortgage lender has legally repossessed the property.

Repossession must follow formal legal action, typically resulting in:

• A court order for possession, or
• A voluntary surrender of the property that has legally transferred possession rights to the lender

Once the lender assumes legal possession, the liability for Council Tax typically shifts away from the former owner.

Repossession is complete.

This means:

• The lender has taken legal possession and
• The previous owner no longer has the right to occupy the property

Simply being in arrears or at risk of repossession does not meet the criteria.

Class L cannot be applied when:

• The property is not formally repossessed

For example:

• Mortgage arrears exist but no legal repossession has occurred
• The lender has applied for repossession, but the court has not yet granted possession
• The owner has abandoned the property but retains legal possession
• Someone else occupies the property

Occupation by anyone – tenants, family members, lodgers, or squatters disqualifies the exemption.

The property has been repossessed but is still furnished and being used.

For Council Tax purposes, “property repossessed” normally means vacant and not being lived in.

Once ownership changes again, responsibility for Council Tax moves to the purchaser, and the Class L exemption ends.

The exemption applies for as long as the lender retains legal possession AND the property remains unoccupied.

There is no fixed time limit.

The exemption continues until:

• The property is sold, or
• The lender transfers ownership or possession, or
• The property becomes occupied

Once any of these occur, the exemption ends immediately.

If you want to apply for a Class L exemption or have a question

Use the Council Tax contact form and choose the following options:

• Under which service would you like to contact us? Select Council Tax
• What would you like to contact us about? Select Something else