Agenda item

The Financial Support Manager presented a report on the subject of Council Tax Empty Homes Discounts and Premiums.  Members were advised that there were two different types of empty homes:

·            Second homes, that were furnished but which were not any person’s main residence.  There was already a policy in place that stipulated that there was no discount on Council Tax offered to owners of second homes and Officers were not proposing that this situation should change.

·            Vacant dwellings, which were unoccupied and substantially unfurnished.  Under existing policies, owners of existing vacant properties were required to pay 50 per cent of the Council Tax on the property for the first six months and 100 per cent of the Council Tax thereafter.  Owners of new vacant homes had a 100 per cent discount on their properties for the first three months, a 50 per cent discount on the following three months and were only required to pay 100 per cent of the Council Tax due if the property remained vacant after six months.  Changes were proposed to the arrangements for discounts in these circumstances.

Under the proposals detailed in the report, the graduated discount system for new homes would be removed.  Vacant homes, both in terms of existing properties and new homes, would be required to pay 100 per cent of Council Tax after a short period of time had elapsed.

There were also discounts that could apply to local authority housing.  Whilst Bromsgrove District Council did not manage any housing stock, there was always the possibility that the authority could do so in the future.  Discounts on Council Tax for Council houses could be invested in housing stock.  For these reasons, it was proposed that this discount should remain.

The report proposed the introduction of premium payment requirements for properties that had been vacant for a significant period of time.  These premiums would apply from 1^st April 2022 onwards.  Property owners would be required to pay a 100 per cent premium for homes that had been vacant for between two and five years, 200 per cent premium for homes vacant between five and ten years and a 300 per cent premium for homes vacant for ten years or more.  The intention of the Government had been that vacant properties that were genuinely on the market for sale would not be subject to a premium and Councils needed to take this into account when introducing premiums.  However, the Council had noted that the local housing market was buoyant, there were some doubts about whether legally these properties could be excluded from the premium and the Council had discretionary powers not to apply the premium if considered appropriate and assessments regarding applicability of this discretion could be made on a case by case basis.

In proposing the recommendations, the Portfolio Holder for Finance and Enabling explained that the Council was trying to reduce the proportion of homes in the district that were empty.  The number of empty homes in the District on the date of the meeting were higher than the national average but it was hoped that measures such as the introduction of a premium payment for long-term vacant properties would help to deter property owners from keeping their properties vacant.

During consideration of this item, reference was made to the Finance and Budget Working Group’s recent debate in respect of this matter.  The group had raised concerns about the 100 per cent discount on vacant homes only applying for the first 14 days after a property became vacant.  Following the group’s meeting, the Portfolio Holder for Finance and Enabling had discussed this concern with the Leader of the Council and they had concluded that the length of time in which this discount would apply could be extended to up to 30 days.  This amendment was agreed by Cabinet.

Reference was made to the aims of the proposals in terms of taking action to reduce the numbers of empty homes in the District.  Members commented that it would be in the financial interests of developers to sell their new homes, although it was also noted that some developers delayed sales in order to maintain demand, which could impact on house prices.  Officers clarified that the application of Council Tax premiums was just one method available to Councils that could be used to discourage property owners from keeping their properties empty.  There were other options, including those detailed in housing legislation, which could also be used to deter empty homes. 

Members also discussed the potential implications of planning policies for the number of homes available to purchase in the District.  Cabinet was advised that the National Planning Policy Framework (NPPF) allowed Councils to take various actions in relation to planning policy but this was separate to Council Tax provisions. 

Reference was made to the 25 per cent discount on Council Tax for single occupancy properties.  Members noted that this would continue to apply in the case of properties with a single inhabitant but would not be extended to other properties.

Consideration was given to the wording for the recommendations that had been recorded in the report.  Officers confirmed that there had been a typographical error in the report, which should have distinguished between Class A second homes with a planning restriction and Class B second homes without a planning restriction. 

RECOMMENDED 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 without 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 30 days - 100% discount

b.          Where the dwelling has been unoccupied and unfurnished for more than 30 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.