Agenda item

The Financial Support Manager presented a report which outlined proposals in respect of discounts and premiums for Council Tax payments for empty homes in the Borough.  The proposed changes would come into effect from April 2022.

The Council’s current scheme distinguished between existing homes that became vacant and new homes that became vacant.  Owners of existing homes had to pay 50 per cent of the Council Tax for the first three months once the property became vacant whilst owners of new vacant homes, generally housing developers, were exempt from paying Council Tax for the first three months. Under the proposed new scheme, this distinction would end.  No Council Tax would need to be paid on a vacant property for the first 14 days but subsequently 100 per cent of Council Tax would need to be paid.  There would be exemptions from this rule, including for social and Council housing.

Consideration had been given to exempting vacant homes on the market from payment of Council Tax under this scheme, but the Council had concluded that payments should apply, partly because it was not clear that the legislation would permit this exemption and partly because the local housing market was buoyant.  The Council could also use discretion to assess requests for exemptions on a case by case basis.

The report also proposed the introduction of premium Council Tax payments for homes that had been vacant for a long time.  Under this part of the scheme, property owners would pay 100 per cent of Council Tax for homes that had been vacant for up to five years, 200 per cent Council Tax for properties vacant for between five and ten years and 300 per cent of Council Tax for properties that had been vacant for at least ten years.  This was designed to discourage property owners from keeping homes vacant in the long-term.

Members discussed the proposals and in doing so commented that housing was in demand and it was therefore important to ensure properties were available on the local market.  It was also noted that, should an exemption be applied to properties for sale, this might be used as an opportunity by a minority of unscrupulous property owners to avoid making Council Tax payments.

During consideration of this item, questions were raised about the potential impact that a limit of 14 days, in terms of the period in which property owners would not need to pay Council Tax on vacant properties, might have on landlords’ ability to update a home before letting to new tenants.  Concerns were raised that this might result in some landlords rushing to complete works, to the detriment of the property and experience of future tenants.  However, Officers explained that previously landlords had had to pay 50 per cent of Council Tax from the first day on which a property became vacant and therefore this exemption for 14 days placed landlords in a better financial position in the short-term. 

RECOMMENDED that

The Executive Committee is asked to RECOMMEND that:

1)         from 1^st April 2022 the level of Council Tax discount to be applied under Section 11A (4) and Section 11A (4A) for each class of dwellings as defined by The Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2003 (as amended) will be:

Class A [“second homes with a planning restriction”] 0%: no discount

Class B [“second homes with a planning restriction”] 0%: no discount

Class C [“vacant dwellings”]

a.         Where the dwelling has been unoccupied and unfurnished for a continuous period of not more than 14 days - 100% discount

b.         Where the dwelling has been unoccupied and unfurnished for more than 14 days - 0%: no discount.

c.         Where the dwelling is

                             i.           unoccupied and substantially unfurnished; and

                           ii.           the owner of the dwelling is a local housing authority; and

                          iii.           when next in use the dwelling will be occupied under the provisions of the Housing act 1985

                         100% discount.

Owner will be defined by reference to section 6(5) and 6(6) of the Local Government Finance Act 1992.

For the purposes of Class C when considering whether a dwelling falls within the description any period of occupation, not exceeding 6 weeks, during which it was not unoccupied and substantially unfurnished shall be disregarded.

Class D [“dwellings requiring major repair works”] - 100% discount

2)         from 1^st April 2022 the additional council tax premium applied under section 11B of the LGFA ’92, for long-term empty dwellings will be

i)           for a dwelling that has been a long-term empty dwelling for less than 5 years – 100% premium

ii)         for a dwelling that has been a long-term empty dwelling for 5 years or more, but less than 10 years – 200% premium

iii)       for a dwelling that has been a long-term empty dwelling for at least 10 years – 300% premium

3)         the Head of Financial and Customer Services on a case-by-case basis may consider a reduction to the long-term empty premium.