Council to continue charging 100% council tax premiums on empty and second homes
Anthony Lewis Local Democracy Reporter
Almost £300,000 is set to be raised by a local authority from charging higher council tax on long term empty properties over the last year.
In 2023/2024, figures show the council is expected to raise £338,613 from the premium on long term empty homes and when taking into account the £40,000 spend on a revenue inspector this figure becomes £298,613.
When the premium for second homes comes in this April, the income from both premiums is set to be £599,680 with second homes contributing £301,067 towards this both next year (2024/2025) and the year after (2025/2026) and £40,000 continuing to go on the revenue inspector role.
Recommendations
The recommendations to full council on Wednesday, February 21 are that the council continues charging a council tax premium of 100% on long-term empty properties that have been empty more than 12 months and that it charges a premium of 100% on second homes from April 2024 following a decision last March.
Another recommendation is to introduce a local council tax exception to help new owners of properties undergoing renovation, not charge a premium for up to 12 months and to not to charge a council tax premium on the domestic element of qualifying composite properties.
Figures in a council report show that there are currently 326 long term empty properties (empty for a year or more) in Merthyr Tydfil which, based on a collection rate of 100%, would generate additional revenue of £483,733 with the premium and based on an in-year collection rate of 70% would bring in additional revenue of £338,613.
There are currently 266 second homes in the county borough and with the premium, based on a collection rate of 100%, would generate additional revenue of £430,096 in 2024/2025 and based on an in-year collection rate of 70% would bring in additional revenue of £301,067.
“Correct decision”
The report said that, as at January 25 this year, there are a total of 902 empty and unfurnished properties in Merthyr Tydfil of which 498 have been empty from more than six months to more than 20 years.
The report said: “Whilst the new legislation allows for a maximum 300% council tax premium, this local authority is currently exercising its discretion not to go to this level at this time.
“We are well aware of the impact that long-term empty properties and second homes have within our communities and the decision to charge a premium on these properties to encourage owners to bring them back into use is a correct one.
“However, the level that a council tax premium is set to, has to be balanced against the adverse impact on the local authorities collection rate and it is to this end that this current level is proposed.”
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I forsee dereliction and abandonment of low value unsaleable properties. Once again high taxation is obviously intended to raise revenue rather than make housing stock available to those who need it. The same principle applies to emission charges etc.
With grant of probate now often taking close to or longer than 12 months, a lot more empty homes will fall into the double tax trap and risk placing the beneficiaries in a difficult financial position. Fix the collapsing probate system would be a good start if you want more homes available.
Many councils waive claim to any council tax while the deceased’s estate is obtaining probate. I suppose any waiver beyond 6 or even 12 months would require further application and some explanation for delays. Knowing that there is a point in time where a payment becomes due is a good incentive for executors to get a move on ! I managed to dispose of a vacant property in 6 months and 17 days last year so the estate only coughed up 17 days at standard rate.
Councils do have discretion and if probate is the problem they may be minded to consider this as a reasonable reason not to charge the premium. It could well be advisable to contact the council as early as possible to advise them of the situation.
You may well be correct there Geraint. Good point. Not looked at that to be honest. It would not change the number of homes locked in limbo waiting for probate to be granted, neither available to rent out or sell.
The financial pressure on owners to make homes available is of course the claimed purpose of additional council tax.
Unfortunately greed by the council will stop any discretion as they are unforgiving of any excuse. Their reputation precedes them
100% council tax premium for second homes in Wales is just a con in most towns in Wales, yes there are places in premium areas where there is a shortage,, but the vast majority of areas there are a glut of properties available at very affordable prices. The truth is Welsh Councils are just using it as an excuse for more revenue because the Senedd is failing us all in Wales. If anyone cares to look at our newest city of Wrexham on Rightmove there is an abundance of properties available starting from well under £85000.00 within three miles of… Read more »