Changes on the basis of the empty-home council tax once approved could yield an extra £540m as of 1st April.
The recent research done by London letting and estates agent, Benham and Reeves, brings to light the fact that councils all around England could perk up to something more substantial which is £540m every year as council tax for properties that are not occupied since new laws come into effect from April.
From April 2013 onwards, local authorities could apply the Unoccupied Premium Council Tax of 50% on homes that were standing empty for 2 years or more . In April 2019, this rate schedule was amended to a regional incentive rate of 100% applied to properties that have remained vacant for a period of two or more years.
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Nonetheless, the local authorities now will be able to apply the penalty consisting in 100% of empty properties’ council tax charge to whatsoever properties which remained vacant for 12 months, unless in some cases particular exceptions apply*.
Before reaching the changes, Benham and Reeves investigated the amount of long-term empty home across England that have been officially classified as such for a minimum period of six months or more, to identify where the council could see a rise in their additional income when the new legislation is in place.
The research illustrates there is served by a figure that Britain houses belong in total 261,189 of which after 6 months and more remained empty. Each property should be paying on average £2065 as council tax. This converts to almost £540m that England’s councils have collected from the empty homes’ council tax annually.
In such cases, these homes would sit empty for up to 12 months or even longer, thus enabling to raise this figure to such a level that the council tax per property on an average would be £4,130 only. This would mean that local councils would receive £1.1bn in revenue in a year.
Concerning the North west is an area where the local authorities count on seeing the most substantial raise in their incomes for the non occupation of homes because of the to discharge tax. It should be noted that there are almost 42,454 dwellings in the region that are vacant, unoccupied, and therefore, according to authorities, are liable for a yearly council tax of 91m£. This amount might be at least doubled to £182.1m£ with newly adopted law in place.
In South East the income from council tax on empty buildings has doubled, up to about £292m from the £146.3m which is already being collected.
Through the postcode analysis conducted in London, it identified $86.3m as the total council tax revenue collected annually from the 36,210 vacant homes spread across the capital, which can be expected to reach $160m.
Director of Benham and Reeves, Marc von Grundherr, commented:
“We’re yet to see the government attempt to resolve the housing crisis in a meaningful way and not only have they neglected the issue of supply for many years, but it’s quite frankly scandalous that so many homes are sitting empty across the nation when we’re in desperate need of more housing stock.
While new changes to the council tax premiums charged on empty homes shows that they are aware of the problem, it’s fair to say that it’s unlikely to act as the deterrent they expect when it comes to forcing these empty homes back into circulation.
However, these changes do have the potential to bring a sizable boost to the coffers of our local councils and we can only hope that this additional income is utilised to help address the issue of housing availability.
When you consider the money they stand to make, it does highlight the benefit of utilising these empty homes to at least address the issue of supply within the rental sector. Rather than pay a 100% council tax premium, these properties could be generating rental income, while also providing tenants with the homes they desperately need. ”
