Government to tackle tax breaks for empty homes owners

Eric Pickles announced a consultation on Monday on proposals to change the council tax discount and exemption regime to make it less friendly to owners of empty homes. This is a welcome announcement and one that reflects the Empty Home Network view that such exemptions and discounts needed to be reviewed to see whether they were really justified.

The key proposals in the consultation document are:

  • give councils the option to remove the discount on second homes completely (there is currently a 10% minimum discount)
  • replace exemption "A" (lasting up to 12 months) for homes undergoing, or having undergone, major repairs with a discretionary discount set locally
  • abolish exemption "L" by making mortgagees-in-possession liable for council tax before the legal owner (repossessed homes are technically in the ownership of the previous mortgagor)
  • introduce an "empty homes premium" for long-term empties ie additional council tax above the normal full rate

Importantly, the government notes its preference to allow money collected as a result of the changes to be retained locally:

If authorities choose to levy council tax in circumstances in which, under the current rules, they could not, Government would wish them to be able to retain the additional revenue locally. (page 15).

It does not seem to have picked up the issue about how any revenue raised would be distributed in two-tier authorities. Currently the majority of council tax raised in any two-tier area accrues to the top level authority (ie. the county council). This means it is unlikely to be invested in housing, as counties do not have housing duties. When the reduction in second homes discounts was first mooted, in John Prescott's rural white paper, it was indicated that money would be retained by housing authorities for investment in housing. In the end, this was not implemented. it would indicate the govenment's commtment to housing if it now ensured that new funding was ring-fenced for housing. We'd also like to see a requirement that money should be re-invested specifically in tackling empty homes.

The consultation runs till 29th December and we are sure that empty homes practitioners will want to submit supportive responses.

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Charging owners of long term empties a punititive coucil tax has long been close to my Heart!.
I have to wonder though, with all this Government talk about Empty Homes, has there ever been a better time to lobby for making it a statutory duty for local authorities?

Paul Palmer
Empty Homes UK Ltd / East Northamptonshire Council