Furnished Empties

[EDITOR: With James Bailey's permission, I am posting here a brief discussion we had to clarify the position with "furnished empties" in the hope that others willl be able to throw more light on it....]

I’ve been told by the Council Tax department of a neighbouring Local Authority that for NHB purposes the empty properties are only ones that are ‘empty and unfurnished’. They do not include ‘empty furnished’ properties. Now to my mind this is wrong, I can’t see anywhere in the CTB1 submission that asks authorities to exclude these and our Council Tax data guru agrees with me.

It is obviously an issue because either they would be under-reporting their empty properties, or if we are wrong, we are over-reporting ours. Either of which has financial implications.

I’m wondering whether they have been confused with the long-term empty criteria for the Premium, which does require it to be empty and substantially unfurnished.

Are you able to confirm my understanding that the NHB return is interested in all properties empty for over 6 months?

it might be helpful if I list the codes that the neighbouring authority have:

  • Empty furnished (PCLB0)
  • Empty unfurnished (PCLC0)
  • LTE 50% PREMIUM (PREM)
  • Second homes (PCLC2)

They still offer a discount for empty and unfurnished properties so still have a need to record whether they are furnished.

Whereas we have:

  • Empty 6 months
  • LTE 50% PREMIUM (PREM)
  • Second Homes (PCLB)

We stopped offering a discount on second homes and empty unfurnished properties in March 2013 so presume our CT felt they no longer needed to record whether they were furnished.

I appreciate that second homes have always had a separate classification and been excluded from the LTE figures (which of course we do), but here they are distinguishing between second homes and furnished empty properties, and excluding the latter from the empty property figures even though not second homes. That is the bit I am confused about!

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New Homes Bonus

I think it would help if you mapped what you think the categories could be, or are, in the different authorities onto the actual CTB form lines.

There is nothing at all to stop an individual authority recording different things about a property in their own databases. Thus a “furnished empty” is certainly possible within a local council tax system.

But this does not enable an authority to over-ride the categories used in the ctb form, and by extension New Homes Bonus calculations, as the latter are entirely dependent on the ctb categories.

My understanding would be (excluding all exempt properties)

  1. Within the ctb returns properties are either unoccupied and substantially unfurnished or not.
  2. In the first case they are “empties” (or vacant); in the second case they are either occupied or second homes..
  3. In the first case, empty homes premium can be applied, in the second it can’t. Beyond that, as far as I know,  local authorities have discretion to charge any level of discount they want – from 0 to 100%.  I have not heard of authorities distinguishing in their discounts between second homes and furnished empties and I haven’t explored whether such a thing is possible to do under the legislation but it might well be. It is certainly possible to set different discount rates in different parts of a local authority so there is quite a lot of flexibility.
  4. But, critically in this discussion, when it comes to NHB ONLY "substantially unfurnished homes" [Class C] can come into the equation so whatever happens with discounts on furnished properties falls by the wayside. 

Please note that the above summary leaves out of the equation the "minor" classes such as D to F.

I added the most recent update to the "Prescribed Classes of Dwellings" regs into our library here, to complement the original SI which is also in our library here.  The explanatory memorandum does throw some light on these matters. There were a couple of further changes between the original and the 2012 amendments but not significant for the purposes of this discussion.

For the purposes of the completion of the CTB, and by extension NHB, it is the lines connected with Class C of the regs which are critical.

If both authorities are using the same council tax system then there might something seriously awry somewhere, as PCLC2 is used for completely different purposes in the two authorities. 

Without passing it to GCHQ or the CIA, I think we can guess that PCL stands for Prescibed Class, which would suggest that the character after "PCL" is the particular class used for a given property. In that case one would expect "C" for unfurnished empties and "B" for "furnished homes that are nobody's principal residence" (=second homes, occupied or not). Subdivisons within that class could then be assigned by the council (C0, C2, etc). That gives local control but enables them to be aggregated back up to the PCLC level for CTB purposes. 

These assumptions are more or less borne out except for their PCLC2 code - you might want to go back and verify with them what the codes in use are, in case something got garbled in transit somewhere.

PS - I should have mentioned that I did this from memory and didn't go back and check the CTB form, which of course does need to be done to verify my assumptions about "Class C" [plus or minus some Class D] lines on the form being the critical ones for NHB.