Views sought on council tax for empty and second homes

We are seeking views on the proposals which are intended to bring properties back into use whilst also generating additional spending power for us, at a time when we are having to make millions of pounds of savings. The need to make savings is due to unavoidable inflationary spending pressures outstripping our council tax raising powers and the grant we receive from government.

The proposed changes follow the government's proposals in the Levelling Up and Regeneration Bill which is being progressed through parliament. The bill makes provision for authorities to increase council tax charges on long term empty and second homes, and comes as other councils consider similar moves.

Under the proposals, we would:

• Increase the council tax premium charge for properties which have been unoccupied and unfurnished for more than ten years from 200 to 300 per cent. This is line with existing legislation and if agreed would take effect from 1 April 2024.  
• Reduce the period of time a property can be unoccupied and unfurnished before being subject to 100 per cent council tax premium, from two years to one year. If agreed, this would come in from 1 April 2024, subject to proposed legislation becoming law by then.
• Apply a 100 per cent council tax premium charge on second homes - properties where there is no resident, and which is substantially furnished. If agreed, this would come in from 1 April 2025, subject to the proposed legislation becoming law by then.

In recognition of the financial impact the proposals may have on affected property owners, we will review our Discretionary Discounts policy setting out the circumstances in which reductions in council tax payments can be applied, should the changes be agreed.

Cllr Richard Bell, our deputy Leader and portfolio holder for finance, said: "As with councils up and down the country, we are trying to balance our budgets at a time of significant inflationary and demand pressures and are operating in very uncertain times. We have had some increases in funding from government in recent years, but these have not been enough. In 2024/25 we face having to find savings of £12.135m to balance our budgets - and that is after an assumed increase in council tax.

"The government's Levelling Up and Regeneration Bill, which is currently progressing through parliament, includes provision for local authorities to apply extra council tax charges on long term empty and second homes.

Financial incentive

"We know other councils are looking at increasing council tax for such properties in anticipation of this bill becoming law and it is only right that we look at it too in light of the challenges we face. Applying additional premiums would also act as a financial incentive for owners to bring these properties back into use and sell them or let them, rather than holding onto them.

"We realise that some of the properties that would be affected are not deliberately being kept empty and are empty because the owners cannot sell or let them for various reasons which are often beyond their control. Introducing the additional charges could therefore lead to an increased financial burden in some cases and that is why we are committed to reviewing the circumstances by which reductions can be applied if these changes are agreed.

"We would encourage people to have their say on what we are proposing through this consultation."

The proposal to carry out consultation was agreed by our Cabinet earlier this month, when it considered a report on our updated Medium Term Financial Plan.