The owners of nearly 100,000 empty or second homes in England are paying reduced or no council tax on their properties despite the cash crisis facing local authorities, it has emerged.

Almost 80,000 empty houses have been enjoying council tax deductions, according to official government figures seen by the Observer, with nearly half of the properties having no council tax applied to them at all. Owners of more than 19,000 second homes were also given money off their council tax bills.

Some of the councils awarding the highest discounts are now moving to end the giveaway. It comes after ministers announced new powers last week for local authorities to charge double the rate of council tax on homes left empty for two years.

Cheshire West and Chester council, which had 2,562 discounted empty homes – the highest in the country – has moved to stop the discounts after admitting they were costing it £1.4m a year. Many of the beneficiaries were private landlords.

The council, which is cutting £11m from public services over the next three years, has been waiving council tax on unfurnished properties for the first month in which they lay empty, then offering a 25% discount for 23 months. This has meant that homes could be empty for up to two years while benefiting from tax perks. However, the council is abolishing all such discounts from today.

Since 2013, councils have had the right to levy full council tax on second homes and empty housing, and to charge a premium on empty housing after two years. Some councils have abolished the discounts as a result.

According to the government figures, 87 councils had no discounted empty homes, including many in London and other areas of high housing need. Other councils have restricted their empty homes discount to one month, which is likely to account for many of the 40,000 empty homes with no council tax charged on them. However, other councils are choosing to keep generous discounts for empty housing, particularly in northern England, where demand for housing is lower but council finances remain under huge strain.

Sunderland had 1,923 empty homes receiving a council tax discount as of last October – the second-highest in England. The council is cutting more than £16m in spending in 2018/19, including more than £2m in cuts to residential and nursing home adult care placements, and other long-term care packages.

A Sunderland council spokesman told the Observer: “Council tax discounts are strictly calculated and only available within strict criteria. There may a variety of circumstances why there is a large number of empty properties receiving this discount in the city, and these are annually reviewed.”

In Wigan, 1,819 empty homes were receiving council tax discounts.

The issue has caused controversy in areas with a high number of second homes. Plans for a big rise in council tax on second homes in the Yorkshire Dales were narrowly defeated last month. Opponents of the proposal described it as “social engineering”.

A spokesman for the Local Government Association said: “It is right that local authorities are able to exercise their council tax discretion in different ways, in order to tailor bills and discounts toward local circumstances and priorities.

“Many councils have successfully brought empty properties back into use by understanding the underlying reasons why properties have lain empty, and have provided assistance to enable the property to be put back into use. We welcome the fact that the government has listened to our call to provide councils with the ability to charge more for empty homes.”