Agenda item

To make a recommendation to Council that a Council Tax Empty Homes Premium of 50% is implemented from 1 April 2018 in respect of properties that have been unoccupied and substantially unfurnished for more than two years.

That it be RECOMMENDED TO COUNCIL that, from 1 April 2018, a Council Tax Empty Premium of 50% be implemented in respect of properties that have been unoccupied and substantially unfurnished for more than two years; and that the detailed governance arrangements be implemented in consultation with the Lead Member.

89.1           The report of the Head of Corporate Services, circulated at Pages No. 24-27, recommended the introduction of a Council Tax Empty Homes premium of 50% to be effective from 1 April 2018. Members were asked to consider the introduction of the premium, which would apply to homes that had been unoccupied and substantially unfurnished for more than two years, and make a recommendation to Council thereon.

89.2           The Committee was advised that the report brought forward a proposal to introduce a 50% premium in respect of empty homes Council Tax from 1 April 2018. The legislation to enable this had first been introduced in 2013 along with discretion for the Council to implement discounts etc. If the premium was introduced, it would apply to properties that had been unoccupied, or substantially unfurnished, for two years or more. Prior to implementing the legislation, the government had consulted on the circumstances in which the 50% premium would not be applicable; those three circumstances were: a dwelling which was the sole, or main, residence of a member of the armed forces who was absent from the property as a result of such service; an annexe deemed unoccupied because it was being treated by the occupier of the main dwelling as part of that main dwelling; and a dwelling which was genuinely on the market for sale or letting. Subsequently, the government had legislated for the first two circumstances but had decided not to do so in the case of a dwelling which was genuinely for sale or letting. However, it was still believed that dwellings in such circumstances should not be subject to a premium and the government had issued guidance to assist authorities in their decision-making. The benefits to the Council of implementing this scheme were more in regard to bringing empty homes back into use rather than for financial gain. There were currently 88 properties which would fall within the criteria for empty homes premium and, if they were charged accordingly, this would bring in additional income of £66,255.59 of which the Council would keep approximately 7% which equated to £4,637.89. The reminder would go to the County Council and the Police Crime Commissioner in the same way that Council Tax income was usually distributed; however, it would also be expected that the Council’s New Homes Bonus position would be improved through long term empty properties being brought back into use; this was based on an approximate figure of £1,591 per property.

89.3           In response to a query regarding ownership of a property, Members were advised that it was intended that the premium would be applied when a property had been empty for two years irrespective of the length of current ownership. It would therefore be possible that a person could buy a property that had already been empty for two years and then be liable for the premium immediately; however, occupancy of a long term empty property for more than six weeks would ‘reset’ the clock and there were already other discounts in place that the owner may be able to take advantage of, such as properties that required major repair work to render them habitable. Another Member suggested that the phrase ‘substantially unfurnished’ was not a very specific definition and she was concerned people could put a sofa into an otherwise empty house and claim it was furnished. In response, the Revenues and Benefits Manager explained that, unfortunately, the definition was not clear and there was limited case law on the point which was not helpful. The Council did have inspection regimes for looking at empty properties and ensuring the discounts/premiums were properly applied but the system was potentially fraught with difficulties. A Member questioned why this was being looked at now and whether it could be reviewed at another time. In response, the Revenues and Benefits Manager advised that she was new to the Council and had brought with her different ideas about how the service should run. She referred Members to Page No. 25 of the report and advised that this was one of a number of general documents that she wanted to review as the Council currently had a whole raft of discretionary powers that it did not use. She also confirmed that, whilst there would be a small amount of additional income, there could be a wider opportunity to bring empty properties back into use. The idea was that, if approved by the Council, all affected residents would be written to advising them of the changes and also asking if there was anything the Council could do to assist them in bringing the property back into use. She explained that the premium had been introduced at her previous authority and had successfully brought a number of properties into use, especially when it was aligned with other strategies. In terms of an increase in New Homes Bonus monies, the Revenues and Benefits Manager explained that the Council received an amount of funding for every property brought back onto the valuation list i.e. the negative effect of the property being empty would be lost.

89.4           A number of Members felt it would be necessary for Officers to use a certain amount of discretion when applying the premium as it did not seem fair to charge someone for a property having been empty when it had only just come into their ownership. In response, Members were advised that the guidance to support the Empty Homes Premium stated that Councils were free to make their own decisions so some discretion was possible. It was suggested that the governance of the system would need to have Member involvement and that it would seem sensible for the Lead Member to be that person. Another Member suggested that, in terms of the definition of substantially unfurnished, it might be a good idea to ask Stroud and Cotswold District Councils how they dealt with this issue as they had already been collecting the premium. In addition, a Member questioned whether the department would have the capacity to implement the premium given the Council did not have an Empty Homes Officer. In response, the Revenues and Benefits Manager indicated that it would be tough for the team as it was not an easy issue to deal with, however, there was an inspection resource available internally, and via the Counter Fraud Unit, so she was confident it could be delivered within the existing establishment.

89.5           Having considered the concerns expressed, it was