Agenda item

Council Tax Second Home Premiums

Purpose

To consider the proposals to introduce a Council Tax Premium on second homes and apply a premium to long term empty properties after one year.

Recommendations

That Full Council resolves to:

Agree from 01 April 2024, to levy the maximum level of premium for Empty Homes as set out in the Levelling Up and Regeneration Act 2023.

a) Premium of 100% for dwellings which are unoccupied and substantially unfurnished (Empty Homes Premium) after 1 year up to 5 years of becoming empty;

b) Premium of 200% for dwellings which are unoccupied and substantially unfurnished (Empty Homes Premium) between 5 years and 10 years;

c) Premium of 300% for dwellings which are unoccupied and substantially unfurnished (Empty Homes Premium) for 10 years or more.

Agree in principle from 01 April 2025 to the implementation of a premium (Second Homes Premium) of 100% for dwellings that are no one’s sole or main residence and which are substantially furnished as set out in paragraph 4.7 of the report.
Agree to issue the mandatory notice of 12 months to all owners of second homes that a premium will commence from 1 April 2025; and,
Note that where premiums are to be applied, the Council is mindful of the current consultation by government which recommends exceptions in certain circumstances outlined within this report. Subject to the outcome of that consultation, a further report may be presented to Cabinet and Council prior to the implementation of the Council's policy on premiums taking into account statute, the Council's requirements and any guidance given by the Secretary of State.

Minutes:

The purpose of the report was to consider the proposals to introduce a Council Tax Premium on second homes and apply a premium to long term empty properties after one year.

The Deputy Leader and Cabinet Member for Finance, Councillor Evemy, introduced the recommendations and made the following points:

The legislation to give councils the necessary powers had been anticipated for some time alongside the guidance for these measures.
However, the timescale for implementation of 12 months was required to provide the formal notification for the second homes premiums. This required a Council decision before 1 April 2024 so that it could come into effect on 1 April 2025.
The new premium for empty properties would increase the premium from 50% to 100%.
The need for affordable housing was important and the new premiums would support this.
Homes being maintained as second homes within the District would have a new premium of 100% Council Tax from April 2025.
It was noted at paragraph 4.7 of the report that the purpose of the recommendations was to discourage residential properties being taken out of use. The Council would not seek to apply the levy to permanent holiday accommodation. This was noted as accounting for 20% of the homes outlined in the report.

There were two questions raised in respect of paragraph 4.5 of the report if the period by which a home remained empty ‘reset’ with transfer of ownership and how the provisions on couples living separately would be applied. The Chair on the advice of the Deputy Leader then invited the Business Manager for Environmental, Revenues and Welfare to answer the questions. It was noted in response that a property with a premium having already been applied, would continue on the same timeframe as under the previous owner. It was noted in consideration for officers to clamp down on avoidance of Council Tax premiums and there were checks that could be used to enforce the policy.

There was a question about the financial implications as part of the report and the £3.3 million of extra revenue of which £246,000 would be retained by the Council. It was noted that the purpose of the empty homes premiums was to disincentivise the retention of empty homes and it was asked if the income generated from this premium was therefore likely to be lower. The Deputy Leader noted that the figures in paragraph 5.3 would be on the second homes premium and the estimate was not on the empty homes due to the point raised. The Deputy Chief Executive confirmed that the projections were based on the second homes premium only. On the empty homes premium, it was noted by the Deputy Chief Executive that the change in the legislation was to reduce the timeline for charges on empty homes from 2-5 years to 1-5 years and the existing policy of 2-5 years was the basis for the Council Tax estimates set out in the Budget passed at February Council. The collection fund position at the end of 2024 would provide an update on the specific amounts.

There was a question by Council regarding holiday home lets and how they could be charged for waste collection to support local services.

Council noted the concerns of many residents around the number of empty properties and the development of new retirement properties within the District. There was also a question around the exception for active marketing of properties and how this would work.

There was a question around when Council has lost touch with property owners and how they would be traced. The Business Manager for Environmental, Revenues and Welfare answered by saying that there were tools to trace them but those who moved abroad could be difficult to find. It was highlighted that officers could use charging orders to recoup money alongside management orders for properties.

There was a question around the share of the income from the new charges. The Chief Executive confirmed that conversations had been taking place with Gloucestershire County Council and the Police and Crime Commissioner to see how best the money raised within the District could be utilised for projects in the District. The Deputy Chief Executive highlighted the Cost of Collection Allowance which the Council as the billing authority could claim for its service in recovering.

Councillor Joe Harris seconded and made the following points:

This proposal was something that the Council had been waiting for some time for.
The Leader thanked the Members of the former Second Homes Working Group and the work of officers to deliver this proposal.
There was an inheritance exemption for up to one year to support families managing the loss of a loved one.
It was a small lever but one that could be used to benefit the District.
The Office of the Police and Crime Commissioner and Gloucestershire County Council would benefit from this levy the most, but that extra money needed to go back into the District.

Council noted some comments that given the scale of the demand within the Cotswolds for affordable housing and queried if there were any alternative uses.

Council asked around the use of active marketing and how that is defined to help stop the avoidance of the premium.

Councillor Evemy in summing up made the following points:

In regard to waste collection, it was noted that the Business Rates regime covers the letting of properties and they may claim small business rates relief to reduce this to negligible amounts. Officers are working on a proposal on how to ensure that the waste collection service is only provided to those entitled to use it.
There were varying demands for retirement properties across the District.
The UK Government would be producing legislation which would address the concerns raised regarding the exceptions around active marketing.
In regard to the amount of funding raised, it was noted that the Council has to go as far as possible despite the sum is being small.
It was hoped that this would help those to reconsider if a second home in a residential area was suitable and would encourage properties to come back on to the market.

RESOLVED: That Full Council

1. AGREED from 01 April 2024, to levy the maximum level of premium

for Empty Homes as set out in the Levelling Up and Regeneration

Act 2023.

a) Premium of 100% for dwellings which are unoccupied and

substantially unfurnished (Empty Homes Premium) after 1 year

up to 5 years of becoming empty;

b) Premium of 200% for dwellings which are unoccupied and

substantially unfurnished (Empty Homes Premium) between 5

years and 10 years;

c) Premium of 300% for dwellings which are unoccupied and

substantially unfurnished (Empty Homes Premium) for 10 years

or more.

2. AGREED in principle from 01 April 2025 to the implementation of a

premium (Second Homes Premium) of 100% for dwellings that are

no one’s sole or main residence and which are substantially

furnished as set out in paragraph 4.7 of the report.

3. AGREED to issue the mandatory notice of 12 months to all owners of

second homes that a premium will commence from 1 April 2025;

and,

4. NOTED that where premiums are to be applied, the Council is mindful

of the current consultation by government which recommends

exceptions in certain circumstances outlined within this report.

Subject to the outcome of that consultation, a further report may

be presented to Cabinet and Council prior to the implementation

of the Council's policy on premiums taking into account statute, the

Council's requirements and any guidance given by the Secretary of

State.

Voting Record

30 For, 0 Against, 0 Abstentions, 4 Absent/Did not vote

For	Against	Abstention	Absent/Did not vote
Andrew Maclean			Claire Bloomer
Angus Jenkinson			Julia Judd
Chris Twells			Roly Hughes
Clare Turner			Tristan Wilkinson
Daryl Corps
David Cunningham
David Fowles
Dilys Neil
Gary Selwyn
Gina Blomefield
Helene Mansilla
Ian Watson
Jeremy Theyer
Joe Harris
Jon Wareing
Juliet Layton
Len Wilkins
Lisa Spivey
Mark Harris
Mike Evemy
Michael Vann
Mike McKeown
Nigel Robbins
Nikki Ind
Patrick Coleman
Paul Hodgkinson
Ray Brassington
Tom Stowe
Tony Dale
Tony Slater

Supporting documents:

Agenda item

Council Tax Second Home Premiums

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