Charging a higher council tax surcharge for empty properties
Tonight at Mayor & Cabinet we agreed to charge a maximum surcharge (Empty Homes Premium) of 100% on properties left empty for two years or more. Previously, we were only allowed discretion to charge 50%.
This is good news and sends a clear message to owners who are leaving properties empty that we intend do everything we can to bring empty homes back into use. The housing crisis creates misery for thousands of our fellow residents. We must do everyting within our power to house as many people into genuinely affordable and decent homes.
Subject to Business Panel, the Setting the Council Tax Base, the NNDR Tax Base & Discounts for Second Homes and Empty Homes report will allow this change to take effect from 1st April 2019 with Full Council approval.
6.1 The Council has the power and local discretion to grant and vary discounts for different types of properties under Section 11a of the Local Government Finance Act 1992, as amended by the Local Government Finance Act 2003 and the Local Government Finance Act 2012.
6.2 The local discretion to grant and vary discounts enables local authorities to create greater financial incentives for owners of empty properties to bring them back into use, either for owner occupation or letting.
6.3 Second Homes – Currently, local authorities have discretion to offer a discount of between 0% and 50% to owners of second homes. The Council currently offers a 0% discount. It is proposed to retain the 0% discount for 2019/20.
6.4 Empty Property Class A exemptions – Currently, a discount can be awarded between 0% to 100% at the Council’s discretion where the property is undergoing structural alteration or major repairs. The Council is being recommended to retain the 0% discount on these properties.
6.5 Empty Properties Class C exemptions – Currently, 100% discount is awarded for four weeks to substantially empty and unfurnished properties. After four weeks, the discount ceases and the full charge is applicable. The Council wants to encourage properties to be occupied as soon as possible. However, in many cases properties can be empty for a short period during a changeover, especially where the property is let. Amounts due for these short periods would be more difficult to collect. For these reasons, it is recommended that the Council continues to offer a 100% discount for four weeks followed by a 0% discount.
6.6 Long Term Empty Properties empty homes premium – Section 11 of the Local Government Finance Act 2012 removed the discount for long term empty properties and introduced discretion to charge up to 50% premium on this category of properties, to encourage the owners of empty properties to bring them back into use. Currently, the Council charges an ‘empty homes premium’ of 50% where a property has been empty for two years or more. In November 2018 the Act was amended increasing the premium from 50% to 100% effective from 1 April 2019, with further incremental increases in future years. Authorities can now charge 100% more council tax on a long term empty property when compared to an occupied property where no single person discount is applicable. It is recommended that the Council increases the premium to 100% for 2019/20.