Tax on empty homes could be doubled to boost housing market

The government is to give local authorities the power to double council tax on homes that are left empty for long periods.

It’s hoped the move will bring more properties back into use and ease the pressure on the housing market.

The new legislation will allow councils to charge double the rate of Council Tax on homes left empty for two years or more. Local authorities can currently levy a 50% premium.

There are currently just over 200,000 long-term empty dwellings in England, compared to 300,000 in 2010.

The number has reduced since 2013, when councils were given powers to charge a 50% premium on Council Tax bills. Most councils currently apply this premium on long-term empty homes.

Through the New Homes Bonus scheme introduced in 2011, councils earn the same financial reward for bringing an empty home back into use as for building a new one. Since 2013, councils have been able to charge a 50% premium on the Council Tax bills of owners of homes empty for two years or more.

The government has published guidance that makes clear that the premium should not be used to penalise owners of homes that are genuinely on the market for rent or sale.

There are exemptions in place for homes that are empty due to the occupant living in armed forces accommodation for job-related purposes, or to annexes being used as part of a main property.

Also, the Council Tax system provides statutory exemptions for properties left empty for a specific purpose – for example, when a person goes into care. Councils also have powers to apply discounts in cases where homes are empty due to special circumstances – for example, hardship, fire or flooding.

There is a Council Tax exemption for homes which are empty due to probate.

We shall keep clients informed of developments.

Please contact Jackie Hand or Dipak Odedra if you would like more information about the legal aspects of buying and selling a home.