Council Tax
1) Introduction
For many years the Empty Homes Agency, together with our partners, ran a long running campaign on Council Tax and empty homes. The message behind this campaign was twofold:
Firstly we campaigned against the discount on council tax for long-term empty property. We argued persistently that such a discount acted as a perverse incentive to keep properties empty, particularly in areas of high demand for housing. We argued that this discount should be abolished in areas of high demand.
In our work with local authorities, we were also concerned at the difficulties that some authorities had in using Council Tax data for their work on empty property. Where authorities had access to such data, it provided an invaluable resource to identify the identity of owners and then to be able to contact them as part of the authorities empty property strategy. Again we argued persistently that it was an illogical use of the Data Protection Act to prevent councils using the data to this effect, which was clearly in the common interest.
2) Local Government Act 2003
As a result of this campaign, and pressure from other organisations, the Government agreed to tackle both of these outstanding issues on Council Tax.
Embedded within the Local Government Act 2003 are two clear statements changing the current position on Council Tax.
Firstly, local authorities have been given the discretionary right to abolish the discount on Council Tax for empty property. We applauded the government for undertaking this action and recognised that it needed to be a discretionary right as, for some local authorities in areas of low demand, such a cancellation of the discount would be very unhelpful and unconstructive to owners of empty property.
The Act also gave local authorities the power to use Council Tax data for their ongoing empty property work.
3) Impact for Local Authorities
The Empty Homes Agency now recommends to all local authorities in areas of high demand for housing that the Council Tax discount is abolished on empty homes. Many local authorities across the country have now taken advantage of this act and removed this unhelpful discount.
The Empty Homes Agency has also worked with local authorities across the country to remind them that they do now have the power of access to Council Tax data. Some local authority Empty Property Officers have found it difficult to access this data, and it is important that the relevant Act of Parliament is cited in defence of such a request. If local authorities do experience difficulty accessing this data, the Empty Homes Agency is very happy to be involved to support this change in legislation.
4) Next Steps
Whilst the Agency supported the abolition of the discount, we felt that the Government missed a major opportunity in not ring-fencing the additional money for work on empty property. This additional money could have been an invaluable catalyst for empty property work.
The Agency is currently campaigning for local authorities to be given the power to retain the additional income raised by the abolition of the empty property discount, if authorities so choose, to invest directly into empty property work. Across London there is huge support for this proposal from both the Mayor of London and the Association of London Government, and this support is mirrored in Kent where Kent County Council have also led the call for the retention of this money.
The Agency is also at the moment considering ideas around an escalating Council Tax on empty property. Some American States have experimented with the idea of an escalating property tax on problem empty properties and have found it to be a very effective tool. The Agency is keen to explore with local authorities whether they would find such a tool useful to them in their ongoing empty property work.
April 2005