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Council could double revenue from empty homes by changing council tax trigger date

Newark and Sherwood District Council Cabinet will meet on January 23,to discuss a policy shift in the Council Tax Empty Homes Premium.

The Local Government Act 2012 enabled local authorities in England to increase Council Tax by adding up to 50% to the charge on long-term empty properties, known as the ‘long term empty home premium.’ This charge was increased significantly in February 2023, where properties empty for more than two years were subjected to a 100% premium, for more than 5 years to 200%, and over 10 years to 300%. This change took effect from April 1, 2023.

Current Proposal and Implications

The key proposal as detailed in a report by Nick Wilson, Business Manager – Financial Services, involves changing the trigger date for charging the empty home premium from two years to one year. This move aligns with the Levelling-Up & Regeneration Bill, which received Royal Assent on October 26, 2023, allowing councils to charge the premium on properties empty for more than one year.

In the 2023/24 charge period, the Council levied the premium on 267 properties, generating over £1 million in revenue. The proposal aims to further incentivise property owners to bring their properties back into use, thereby addressing the housing shortage.

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If the proposal is accepted, it could potentially double the income from these charges. For instance, as of October 1, 748 properties have been empty between 1 and 2 years, with a current Council Tax liability of approximately £1.43 million. Implementing the new premium rules would double this amount.

Financial and Legal Implications

Financially, this proposal could significantly boost the Council’s budget. The increase in the Collection Fund from long-term empty properties in Newark and Sherwood District would be about £1.43 million, with £114,500 directly benefiting the Council’s budget. This additional revenue would be shared with Council Tax preceptors at proportionate levels. Legally, the change aligns with the Local Government Finance Act 1992 and does not pose any direct legal implications.

Community and Housing Impact

This initiative is part of a broader strategy to increase the supply, choice, and standard of housing in the district. By reducing the number of empty homes, the Council aims to address the pressing housing needs of the community. It also aligns with the Council’s objectives and government policies aimed at reducing housing shortages.

Next Steps The Cabinet’s recommendation will be referred to the Full Council for final approval. If accepted, the new charges could become effective from April 1, 2024. The Council plans to promote the new scheme through a press release and direct communication with owners of long-term empty properties to ensure they are aware of the change.

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