Empty properties could be hit with treble the standard rate of council tax

Anthony Lewis, local democracy reporter

Properties which have been empty for more than three years could soon pay treble the standard rate of council tax.

Under council tax premium proposals which Rhondda Cynon Taf’s cabinet could agree to consult on at a meeting on Wednesday, July 17, properties which have been empty for between three and five years or more than five years could see their council tax liability go up to 300% of the standard rate from the 200% (double) they currently pay.

The other proposed change is that those empty between one and two years would go up from 150% to 200% of the standard rate of council tax.

Those empty for up to six months would continue to be exempt from council tax, the rate would still be 100% for those empty between seven months and a year and those empty between two and three years would continue to pay double the standard rate (200%).

Compulsory Purchase Order

The council is also considering the potential option of Compulsory Purchase Order (CPO) proceedings in specific circumstances as a further tool to bring about change and reuse of empty properties where it becomes clear that there is no realistic prospect of an owner taking any action to enable reuse.

The cabinet report said despite the introduction of the premium in April 2023, there has only been a modest reduction in the number of long-term empty properties and there still remains over 1,500 long-term empty properties across Rhondda Cynon Taf with 230 having been empty for more
than 10 years.

It said that the prospect of paying a higher level of premium on the council tax bill may encourage more property owners to bring their empty homes back into use in a more timely manner.

As at May 31, 2024, there were 1,065 properties empty for up to six months, 608 between seven months and a year, 586 between a year and two years, 247 between two and three years, 226 between three and five years and 459 for five years or more.

2025

It is proposed that the increased premiums for long term empty properties would be introduced from April 1, 2025.

The council would write to each home-owner as part of the consultation to invite their feedback and the cabinet report said that the legislation already has a number of statutory exemptions defined and these will continue unaffected by the proposal adding that as at May 31, 2024 there were 376 properties being “excepted” from the premium.

The charging of an increased premium on long-term empty homes would raise
additional revenue through the council tax which is estimated, initially, at £750,000 in a full year but this will be subject to ongoing review.

It is also proposed that the premium in respect of second homes should be kept at 100% so there would be no change here.

Legislative changes

From April 2017, councils in Wales have been able to charge higher amounts (a premium) of up to 100% on top of the standard rate of council tax on second homes and long-term empty properties.

The legislative changes were made by the Housing (Wales) Act 2014 and the decision about whether to charge a premium on second homes or long-term empty properties (or both) is to be made by each council.

From 1st April 2023, the regulations were updated to allow councils to charge maximum premium of 300% on top of the standard rate of council tax.

In January 2023, following a public consultation, RCT Council agreed to introduce a council tax premium for long term empty properties and second homes.

In relation to long term empty properties, it was agreed that for properties which had been empty for between 12 and 24 months a 50% premium (150% of the standard rate of council tax) would be payable and for those that were empty for more than 24 months, a 100% premium (200% of the standard rate of council tax). These premiums came into force in April 2023.

Second homes

In relation to second homes, the premium level is 100% (200% of the standard rate of council tax) and this came into force on in April 2024. If approved by cabinet there would be a six week consultation this summer.

The aims of the council tax premium legislation is to allow councils to bring long-term empty homes back into use to provide safe, secure and affordable homes and to support councils in increasing the supply of affordable housing and enhancing the sustainability of local communities.

Since the implementation of the Empty Homes Strategy (2022-2025) and the previous empty homes strategy (2017-2022), the number of empty homes in RCT has reduced by 922 but the cabinet report said that whilst this reduction is positive, there are still a high number of empty homes across RCT.

The recent draft Local Housing Market Assessment (LHMA) 2023 – 2038 identified that there is a need for more affordable housing units and the report said that new build developments alone will not sufficiently meet this demand which further reinforces the need to bring existing housing stock across RCT back into use.

Since the removal of the 50% council tax discount for empty properties in 2018 and the introduction of a council tax premium, the council has seen an increase in the number of requests for advice and assistance from both landlords and home-owners, to bring their properties back into use, which it said shows the positive impact this has had on the number of empty homes across RCT.