Local authority proposes higher rates of council tax on empty properties

Anthony Lewis – Local Democracy Reporter

Proposed increases in higher rates of council tax charged on long term empty properties in a local authority are going out to consultation

At a full council meeting on Wednesday (July 17) it was agreed that a consultation on the proposed changes would come in from April 2025.

It will include a 100% premium for those empty for between one and five years, a 150% premium for those empty between five and 10 years and 200% for those empty for 10 years or more.

Premium charges on second homes would remain at 100% for 2025/2026.

From April 2017, councils in Wales have had discretionary powers to charge council tax premiums on long term empty properties and second homes as part of a strategy to bring long term empty properties back into use.

This means that a property that has remained unoccupied and largely unfurnished for a continuous period of at least one year may be liable for a premium charge and this could be up to 300% on top of the standard rate of council tax.

Empty

From April 2023, Merthyr Tydfil Council has charged a 100% premium for long term empty homes that have been empty for more than one year.

There are currently over 450 long term empty properties which have been empty for six months or more in Merthyr Tydfil.

345 long term empty properties are being charged a council tax premium of 100%. Of these, 79 of them have been empty between 5-10 years, and 88  have been empty in excess of 10 years.

If a decision is made by the council to charge premiums, any additional income will be used to help target and bring empty properties back into beneficial use, so increasing the housing supply.

The report said the council already sought to incentivise owners to act positively in bringing properties into beneficial use in a number of ways.

Some properties are exempt from council tax including properties requiring or undergoing structural repair for up to 12 months and properties that are unoccupied and largely unfurnished for up to six months.

Certain properties are exempt from premiums, including those being marketed for sale or rent at reasonable prices (for a further year), annexes forming part of a main dwelling, and properties which would be a person’s main residence if they were not living in armed forces accommodation.

The introduction of council tax premiums on long term empty properties from April 2023, in Merthyr Tydfil has generated additional revenue within the financial year, 2024/2025, of £322,000.

Revenue

A council report said increasing the premium level on long term empty properties that had been empty longer than five years would generate additional revenue from April, 2025, and subsequent financial periods.

It said that the level of premium that had been determined had affected the level of revenue generated as well as the collection rate for these property types.

The collection rate on long term empty properties for 2023-2024 was 79%,
against the in year overall collection rate of 94.3%.

The report said: “The greater the success in bringing properties back into use will result in less revenue being generated from council tax premiums, but it will have a positive impact in reducing the local authority’s burden on available housing and homelessness.”

It also said that the increase in a premium change might impact on the local authority’s discretionary policy for those council tax payers who could evidence financial hardship.

Councillor Andrew Barry said the blight of these empty properties include illegal occupancy, rats and fly tipping.

He said this is just one measure and there are multiple areas they are looking at.