Consultation on exemptions from the empty homes premium

Hi the link below is the governments consultation on the exemptions of the premium:

1. Properties for sale and rent

2. serving members of the forces

3. Annexes treated as part of the main dwelling.

Our council tax team had a concern regarding the policing of this, when the same happened with the business rates nearly all owners of empty commercial premises avoided the charge as the put them up for sale, albeit refusing all offers made.

Does any other areas have any experiencing of ensuring properties are 'genuinely' for sale and rent?


DCLG has today published a consultation on the Government’s proposals on exceptions to the council tax Empty Homes Premium - dwellings which may otherwise be liable for the Premium, but which are subject to circumstances which mean that it would not be appropriate for it to apply. This is available on the Department’s website at:

Responses are invited by 9 November 2012. For enquiries and responses please email:

Alternatively you can write to:

Council tax team
Department for Communities and Local Government


Eland House

Bressenden Place


Council tax - discounts, access to info etc

Luke, thanks for starting this thread where we can perhaps collect together all the views on this subject from our members.
I suggest that EHN's response is that there should not be an exemption of this nature.  We do want the premium to be under local control.  Properties will sell in most markets if priced right. In the relatively small and localised areas where properties will not sell because of complete market failure then local authorities should be able to use their discretion not to impose the premium.(and I believe they will be able to do so under their proposed powers).
Implementing this exemption on a property-by-property basis will be a nightmare for the reasons you have indicated.  The dwellings will already have been empty for two years at the point when the premium kicks in - ample time to have sold or rented the property if the price is right.

I agree with everything said so far.
The way we gauge wether a property is genuinely for sale or let is to ascertain the sale/rental price and any agents' details and any specific rental conditions e.g. no benefits or pets, etc.
If the property is still empty 9 months later we ask them to review the price/agents and conditions to widen the market - or they can sign up to our leasing scheme, allow us to help find tenants or help market the property.
If the owner does not do this then we inform them we will consider enforcement to secure occupation and will use their refusal to drop the price, drop the rental price or widen the market to let to as a basis to argue to an RPT for EDMO purposes that the property is not genuinely for sale or let.
This would be a nightmare for ctax exemption purposes and I think we should definitely be arguing these properties should not be exempt
Sue Li

Sue Li

Compulsory Purchase and Enforcement Officer

Derby City Council

The Consultation says of assessing whether a prop is for sale, " We consider that authorities will already have in place tools for assessing which dwellings would qualify for this exception in their locality."
Who has these tools? EPOs have a method for the few cases when we get into a scrap with an empty owner (as mentioned by Sue above).
Council Tax don't have such tools. Whether a property is vacant and for sale or rent is an irrelevance to CTax.  CLG need to know this. They are making the system less cost-effective to run.
Whatever next?..  I've a knackered old Capri parked in the road. I think I should be exempt from road tax as it's for sale. 

Nick P-G
Reading BC

Are they referring to EDMO exceptions when they talk about LAs already having the tools to assess whether properties are for sale or rent? That's the only place where I can think that there is already wording of this kind.  Of have I just made that up?

I assume that is where the wording came from, but its not a mechanism by which we will be able to attain the information, but a situation which we are required to exclude, as with the serving member of the forces.
Also Nick, how much for the Capri?

Just a small other point, annex A of the consultation document has a list of the current exemptions, with a note after A and C stating they are subject to reform. There is nothing after exemption L, have they given up on the potentail primary legislation changes to make the mortgage companies liable?

Unfortunately I can't locate the source immedialely, but I am sure I recently read in an authoriative source that exemption "L" was still subject to further evaluation. 
Interestingly I recall one of  the reasons given was that CLG was not sure that the tax would be collectable. I interpret this as meaning that the liability would in fact fall on the repossessed owner rather than the lender.  That is certainly possible as I have a notion that  "repossession" does not mean "full ownership": I think that the repossessed owner techincally remains the owner until the property is sold and a "mortgagee-in-possession" may not fit into the hierarchy of liabilities that determines who in principle is the liable person.
In our consultation response on this we put in a caveat that we would only support the removal of the exemption if the resultant liability did NOT fall on the repossessed owner but that we would rsupport the removal of the exemption if the cost was to fall unequivocally on the lender (meaning also that the lender should not be able to deduct anycouncil tax paid by them as costs from the proceeds of the sale).
Given that the banks nowadays seem to be at the top of the pecking order in our society the chances of any measure that might adverssely affect the banks gaining any traction seems remote.

Our experience is that there wont be enough resources to police this and  the consultation talks about being " genuinely up for rent or sale " - How do you prove that - some will be self evident, but if a property is for rent at say £75 pm above the " market " rent  - who's to say that is someone with an overinflated opinion of its worth. We have all met those owners ?
I am more worried about bogus tenants and properties being unbanded.
In a nutshell there shouldnt be  a distinction, if its been empty for 2 years it attracts a premiun,
For what its worth, I think properties stuck in probate after 2 years ( and are still exempt )  should attract a charge as it might help move it along.
Darryl Lawrence

Our draft consultation response on the exceptions has now been published. Please offer any constructive comments you may have.  The draft is downloadable from here.
The main text is copied below for your convenience:

General comments
The relationship between central and local government
We think that paragraph 1.3 contains contradictory policy positions. It starts by saying that “it will be for individual billing authorities to design their own schemes for applying the Premium in their local area” but then goes on to state that the government thinks that there are circumstances where the Empty Homes Premium should not apply. This shows little confidence in the ability of local authorities to arrive at appropriate scheme and exemptions that meet local circumstance. 
We think that the starting position should be that local authorities should be expected to bring their creativity, insights and local knowledge into the construction of their local schemes and the Secretary of State should, in the main, hold his or her powers in reserve.  For the most part, centrally-imposed criteria should only be introduced where it is clear, based on an evaluation of evidence, that there is a need to do so.


Q.1 Do you agree with the Government’s proposals on the circumstances in which property should not be liable to the empty homes premium?
We address the 3 proposed sets of circumstances individually.  As we don’t agree with all of the proposals the single answer to Q1 would be “No”.
A - A dwelling which is genuinely on the market for sale or letting
This criterion is highly problematic both in principle and in practice.  Virtually throughout England a home that is “genuinely on the market” will be sold or let long before 2 years have elapsed, if it is being offered at the appropriate price.  The only circumstances in which this would not be true (if indeed there are any) would be where there is a total collapse of the housing market.   Almost by definition, therefore,  a home that has been empty for 2 years will not have been “genuinely on the market” for two years, making it difficult to see the rationale for a general exemption of this nature.
This significant downside to this proposal is that it is an invitation to empty homes owners to challenge the imposition of the empty homes premium and for what should be a simple administrative exercise to become mired in expensive bureaucratic and quasi-judicial processes such as appeal tribunals .  What constitutes “genuinely on the market”?  Does the home only need to have been “genuinely on the market” at the point when the dwelling becomes eligible for the premium? How much time will the local authority be expected to devote to establishing the marketing history of the property?  Will powers be given to local authorities to require estate agents and others to disclose the information they may have at their disposal that would throw light on the position?  Will
Why do not know why the government considers that “authorities will already have in place tools for assessing whether dwellings would qualify for this exception in their locality”?  As far as we are aware, the only circumstances in which the local authority would be applying this criterion is in the context of an application for an Empty Dwelling Management Order.  Few authorities have introduced such orders and they are made reluctantly in the context of homes that are, for the most part problematic and which according to CLG have on average been empty for 7 years.  EDMO cases are known to absorb significant amounts of officer time, sufficient to deter many local authorities from  even using the EDMO powers at all;  and it is relevant that local authorities will make the assessment of whether a dwelling is genuinely on the market in the context of presenting a detailed cased to a hearing by a Residential Property Tribunal.   
In short, we do not think local authorities in general  “have in place” the tools needed and where they are required to establish this collecting the evidence is a labour-intensive process not appropriate for the relatively routine task of collecting council tax.
We envisage that some local authorities would  introduce exemptions from the empty homes premium for particular streets or areas where the housing market  has failed  and where they feel that the imposition of the empty homes premium would be unduly punitive:  such exemptions might apply whether a home was being marketed or not.  This is exactly the kind of local judgment that central government cannot make:  the discretion of local authorities should be respected.
In summary we strongly disagree with this exception.
B - A dwelling which is the sole or main residence of a member of the armed forces, who is absent from the property as a result of such service.
We agree that the circumstances around service personnel are sufficiently unusual to warrant this exception.   
C - An annex deemed unoccupied because it is being treated by the occupier of the main dwelling, as part of that main dwelling.
In the light of the broad policy objective of making best use of English housing stock, keeping  a self-contained annex empty is a waste of useful housing accommodation.  It can be the case that such annexes have received special consideration under planning laws to allow them to be built or that they have absorbed public funds in the provision of disabled facilities, meaning that the community has a legitimate interest in their beneficial use.  Where the use of the dwelling is particularly closely tied to the main dwelling there may already be a planning condition in place that means the annex would be exempt (class “T”).  Where the tie between the main dwelling and the annex is less tight, the justification for any special treatment is correspondingly less.
With the introduction of the so-called “bedroom” tax to encourage better use of social housing it seems inequitable to penalise social housing tenants for under-occupying their properties while giving special tax breaks to private sector owners to make it easier for them to under-occupy their properties.
We would restate the position  that exceptions of this nature should be left to local discretion, which in this case might be applied to individual circumstances.
Q.2 Do you consider that these circumstances should be set out in regulations?
We suggest that regulations should be restricted to the very clearest circumstances only.  We would only support the introduction of regulations for situation B above.
Q.3 Are there any other circumstances in which property should not be liable to the empty homes premium, and why?
Possibly – but such circumstances are probably local in character and should be left to local discretion.

My thoughts on the Empty Homes Premium … the PR flagship of “Technical Reforms of Council Tax”.
 Genuinely on market for sale or rent.
Imposes an additional cost on the Billing Authority. The problem arises with ‘genuinely’. We, EPOs, consider it on a few cases. How much will it cost for the Billing Authority to apply the same test on many more properties? Running costs might exceed income. Running costs are not simply limited to Council Tax admin, but include complaints, appeals, and cost of recovering 'hard to collect' liability. The proposal is not watertight.
 Armed Forces.
Why bring armed forces property into the Empty Homes Premium debate? PR. The CLG paper states that armed forces are exempt from CT liability anyway. Class O exemption already applies to ‘Armed Forces Accommodation” and is applicable ad infinitum. So the Premium would never apply anyway.
MOD website says that the MOD DIO SFA manages around 50,000 properties. CLG website says that since 2004, there have always been at least 45,000 Class O exempt dwellings in England. My head hurts.
In this consultation section, the Government is telling us exactly what we can do with unoccupied annexes. “We are going to review Annexes, and in the meantime we telling you not to impose the Empty Homes Premium (which isn’t in force yet anyway) on unoccupied annexes” Localism from the top drawer.
 I do hope someone; somewhere is doing a serious financial impact assessment on the Empty Homes Premium.
The circus continues. More crazy than cruel ....

Nick P-G
Reading BC

Hi Nick
Your reaction to the service personnel exception was the same as mine - ie it's covered by Exemption class "O".  But after a little bit of digging I found the rationale behind it:  Class "O" applies only to dwellings owned  by the armed forces eg the MoD.  However, service personnel can own or rent dwellings on their own account.  So when they are away on service these homes would not be exempt and could fall into the LTE category. 
There are one or two "real-world" questions that occur to me:  for example, the property would have to be the service person's main or sole residence, which would imply that they are keeping their furniture in storage while they are on tour.   And it seems highly unlikely that anyone would be renting an empty property long term.
But you can see the logic behind the exception if you work on the basis that the service personnel have no choice about their posting abroad and are performing a vital public service.
Incidentally there is an issue about rates of council tax payable on accommodation owned by service personnel when they are serving overseas. Some local authorities give 50% discount, some 10%.  It's not clear whether this down to normal variations in discount policies or something specific about whether such a home (if furnished) is treated as a main residence but with no occupiers (=50% discount) or as a second home (discount varying from LA to LA). . See The Armed Forces Covenant in Action? Accommodation paras 68-69.
Regarding exemption class O I am not sure if you are implying that there is a lot of council tax being "lost" - but if so I can release you from your misery because it doesn't work like that (apparently).  Service personnel pay a "charge in lieu of council tax" on their accommodation and I believe this is then passed to local authorities.  The reason for doing it this way is so that service personnel do not end up with different take-home-pay simply because of different rates of council tax in the places they are posted to....
Can’t find the current official document where I originally read this but here is a thumbnail sketch from the MoD site:

All Service accommodation in England, Scotland and Wales is formally exempt from the Council Tax regime and the MOD instead pays Contributions in Lieu of Council Tax (CILOCT) to local authorities, broadly equivalent to the amount of tax that would otherwise be due. The average contribution, determined by the type of property occupied, is then recovered from Service occupants with their accommodation charge.

As the story explains, the position is then complicated further by the fact that those on overseas active service get a (recenlty-increased) rebate from the MoD.

I think the Empty Homes Premium exemption for armed forces personnel away for 2 years or more is a good thing.
How many homes are left empty for more than 2 years because the liable person is in the armed forces and is posted away from home on a tour of duty or posted at a home base unit? 
1,000? 10,000? 100,000?
I watched all of Eric Pickles speech at the Conservative Party Conference. In it he announced he is making Councils prioritise armed forces personnel for 1st-time buyer and shared ownership housing. This is a good thing too. He also said, "without constant vigilance – the cigar-chomping Commies will take over." 

Nick P-G
Reading BC