The changes will enable councils to bring empty homes back into use quickly and it is hoped that this will help to ease the shortage of housing across the country.
Summary of changes
Discounts and exemptions, previously granted under statutory regulations, will no longer apply to empty properties and second homes:
• The full council tax will be charged on second homes (furnished properties where no-one is currently living or the owner has a main home elsewhere). The previous 10% discount will no longer apply.
• Empty properties will no longer be exempt from payment for the first 6 months. Instead, an exemption will be allowed for one month, then a charge of 50% of council tax will be payable for the next 5 months. After this period, the full council tax becomes payable. The previous Class C exemption will now no longer apply.
• Empty properties undergoing or requiring major or structural repair will no longer be exempt from payment for up to 12 months. Instead, a charge of 50% of council tax will be payable for up to 12 months. After this period, the full council tax becomes payable. The previous Class A exemption will now no longer apply.
• Properties that have been empty for more than 2 years will be charged a premium of 50%. A charge of 150% of council tax will be payable.
What do the changes mean to property owners?
The recent changes mean that the following council tax payers will be facing an increase in their council tax:
• Owners of second homes
• Owners of empty properties
• Owners of properties that were empty for 2 years or more at 1 April 2013
• Anyone who owns a property that is in need of or awaiting major works or structural repair and remained empty at 1 April 2013.
Councils believe that by bringing in these changes, they will be in a position to push owners of empty properties back into occupation or risk losing them, especially those with properties that have been empty for 2 years or more.
Help and advice for owners of empty properties
There are, at present thousands of empty properties across the UK, that have been vacant for over 6 months. These properties can be an eyesore and have a negative impact on the community. To address this issue, many councils are introducing a variety of measures to get these empty properties back into occupation, including:
• introducing free ‘matchmaker’ services for owners and potential developers of empty homes
• investigating complaints received about empty homes and taking action to bring them back into use
• providing advice for the owners of empty homes
By bringing these empty properties back into use, councils believe that they can:
• Increase the supply of housing
• Help create sustainable and safe communities
• Respond positively to public concerns
What cannot be changed
Most of the council tax legislation is set by government and councils do not have the power to change them. Here are a few examples of instances where they have no discretion to change the legislation:
• decisions about whether a property is liable or not for council tax and the band that it is in (it is the government's Valuation Office Agency that decides this)
• the rules around who is liable to pay council tax
• the amount of the Sole Occupier Discount (25%) or criteria for claiming it
• the rules around other properties being exempt from council tax e.g. where the owner has died or is in a nursing home
• the rules around other properties being allowed a discount from council tax e.g. where certain occupants are students, carers or severely mentally impaired
The outcome
These new changes will prove to be hugely expensive for owners of long-term empty properties, in particular, so one possible solution is to make them available as affordable housing by placing carefully vetted property guardians into them, via companies such as Guardians of London.
These guardians are often professionals or key workers (nurses, policemen/women, teachers etc) and, by putting them into these properties to live in and look after them, landlords are not only able to protect their empty properties from damage and the risk of occupation by squatters, but they can save themselves a large increase in council tax at the same time.
