Agenda item

Council Tax Premium Scheme for Second Homes and Long-term Empty Properties




That the premium rate be increased to 75% for long term empty properties and 100% for second homes from April 2023.


Councillor Preece, having earlier declared a personal and prejudicial interest, left the room before the item was introduced.


The Chief Officer (Governance) introduced the report and explained that at the request of Cabinet, an extensive public consultation was undertaken from 8th November 2021 to 6th December 2021 to canvass the views of the public on the current Council Tax premium scheme, its effectiveness and impact on the local community and the use of the scheme to incentivise owners to bring properties into full use to support the supply of local housing for local residents.  The consultation also explored opinions on alterations to the premium rates and the perceived benefits and risks to adopting any alternative or amended scheme.


504 consultation responses were received from a broad range of people and the responses were summarised in the report.


The role of the premium was focussed on encouraging owners of long-term empty properties to bring them back into use with the financial burden and affordability issues that could result on those parties such as new owners or existing owners who did not have the option or the funds to take immediate steps to bring the property back into use.


The Revenues and Procurement Manager explained that previously, since April 2017 when the scheme was introduced, a premium rate of 50% had been applied for dwellings designated as being periodically occupied (usually referred to as second homes) or long-term empty properties.


He added that as part of the consultation exercise, questions were also asked of those who could be potentially impacted if the rates were increased.  In conclusion, almost two thirds of respondents felt that long-term empty properties had a negative impact on their local community.  On second homes, almost half of respondents felt they had a negative impact on their local community.  Just over half of respondents felt the premium rate should be increased to over 50%.


The report provided details of what other local authorities had set their premium rates at.  Cabinet had recommended 75% for long-term empty properties and 100% for second homes.


If the Council decided to raise the level of the premium on long-term empty properties and/or second homes, there was a possibility of increasing the Council Tax yield and to use any additional revenue generated to help meet local housing needs in line with the policy intentions of the premium scheme.


The additional revenue generated to support services would depend on the revised level of the premium rates but would typically consist of an additional £101k for every additional 10% levy above 50% on long-term empty properties and an additional £28k for every additional 10% levy on designated second homes.  Tables in the report provided illustrations of the increase for 50%, 60%, 70%, 75% and 100%.


There was an amendment to the recommendation as printed in the report with the amendment being “For Council to consider the current rate of premium of 50% on second homes and long-term empty properties and determine whether the rate should be varied to 75% for long-term empty properties and 100% for second homes from April 2023, as per Cabinet’s recommendation”.


Councillor Mullin moved the recommendation which was seconded by Councillor Bithell.


Councillor Bithell explained that empty homes was part of his Cabinet portfolio and he felt that Council Tax premiums was not the only answer to what were complex issues in bringing empty properties back into use.  There were homeless who needed to be accommodated when properties throughout the county were left empty. 


Councillor Richard Jones felt the response to the consultation was low with the percentage responses being close.  He commented on the potential for a saving of £390,000 and queried whether that was the reason for the proposals before Members, which he felt could not be relied upon.   He said if residents changed their behaviour there was a chance that no extra money would be received. 


Councillor Carberry thanked officers for the work on the report and the graphics contained within.  She felt the sample size of the consultation was good when compared to national consultations.


Councillor Swash supported the Cabinet recommendation saying that the data proved that the 50% premium was failing in the aim to bring the homes back into use, with the housing crisis being the largest challenge being faced by the Council.  


Councillor Parkhurst supported the proposal of 75% for long term empty properties to assist with the housing shortage.  However, he felt that measures were being rushed and the implications of 75% for self-catering accommodation which fell into the category of second homes had not been thought through.  He proposed an amendment which was to increase the long-term empty properties to 75% but leave second homes at 50%, pending an appraisal of the impacts in respect of self-catering accommodation by way of a Task and Finish Group.  The amendment was seconded by Councillor Attridge.


In supporting the amendment, Councillor Peers commented on the circumstance when somebody had inherited a property which then became classed a second home and would be subject to capital gains tax.  The consequences of that was not contained within the report and he queried the disparity between the two rates.


Councillor Crease asked for clarification on whether it was about raising revenue or bringing empty homes back into use.  Councillor Bithell, as Cabinet Member for empty homes, said he seconded the recommendations based purely on bringing back empty homes into use, and not from a revenue income perspective however some revenue would be received.


In response to a question on if a Member felt the Code of Conduct had been breached by another Member, the Chief Officer (Governance) said that advise should be sought from either himself or the Deputy Monitoring Officer outside of the meeting.


A number of Members spoke in support of the amendment with one Member speaking against.  On being put to the vote, the amendment was LOST.


Councillor Peers queried on the effectiveness of the scheme which was to incentivise owners to bring properties into full use to support the supply of local housing for local residents.   He gave an example of if a resident inherited a property that was over £200,000, then that was not an affordable home.  He asked if there was evidence of the value of second homes as that information was not contained within the report which made it difficult to understand how the properties being brought back into use would support the affordable housing market.  He queried what the use of additional income would be used for, which he felt would either be to support the demand in services or local housing needs which he felt was not demonstrated. 


Members were advised that they now needed to vote on the substantive motion of an increase to 75% on long term empty properties and 100% for second homes which was CARRIED.


Councillor Preece returned to the room and was advised of the decision.




That the premium rate be increased to 75% for long term empty properties and 100% for second homes from April 2023.

Supporting documents: