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MAIDSTONE BOROUGH COUNCIL

 

CABINET

 

Wednesday 12 FEbruary 2014

 

REPORT OF Director of Environment and Shared Services

 

Report prepared by Stephen McGinnes 

 

 

1.           Council Tax Premium for Long Term Empty Properties

 

1.1        Issue for Consideration

 

1.1.1   To consider whether the council should exercise the discretion provided within the Local Government Finance Act 2012 to charge an additional premium for properties that have remained empty for over two years.

 

1.2        Recommendation of Head of Revenues and Benefits

 

1.2.1   That Cabinet recommends to Full Council the introduction of a

          premium of 50% to the Council Tax payable for properties that have been empty and unfurnished for two years.

 

1.2.2   That the change be introduced from the 1^st April 2014, taking

          account of any prior periods that properties have remained empty when considering the 2 year threshold.

 

1.3        Reasons for Recommendation

 

1.3.1   The Local Government Finance Act 2012 introduced a new discretion

for the Council to vary certain categories of council tax discounts for empty properties.  It also provides the option for the Council to charge a premium for properties that have been empty for two years or more. 

 

1.3.2   The changes provide an important tool both to encourage the use of

such properties given the significant demand for housing and generate additional revenue to help mitigate the wider pressures on the Council’s budget and general level of council tax for residents.

 

1.3.3   The Council has the option to charge an additional premium for properties which have been empty and unfurnished for 2 years or determine such classes of properties for which such a premium should be charged.

 

1.3.4   Such properties are currently charged the full rate of council tax with the legislation allowing the Council to now set an additional premium between 0-50%.

 

1.3.5 The Secretary of State has through regulation prescribed classes of property for which a premium cannot be charged, including;

·         A dwelling which is the sole or main residence of a member of the armed forces, who is absent from the property as a result of such service.

·         An annex deemed unoccupied because it is being treated by the occupier of the main dwelling, as part of the main dwelling.

 

1.3.5   Any adjustment of the above discount/premium will be reflected in the Council Tax Base, increasing the amount of council tax to be generated by the Borough Council, Kent County Council, Police, Fire & Rescue and Parish Councils in line with their individual proportion of the overall council tax set.

 

1.3.6   There are currently 197 properties within the borough that would be affected by such a change.

 

1.3.7 In considering the change Cabinet would also be asked to take account of the following points

 

·         There are a range of statutory exemptions to protect owners who have no choice in leaving the property empty, such as properties subject to probate or left empty due to the owner being in care or hospital. There are no plans to change these exemptions.

 

·         That the Council is proactive to support owners bring empty properties back into use, providing support to plan works, grants to meet the cost of essential repairs and help with advertising.

 

·         The council currently has 1282 applicants seeking housing through the councils housing register, with 34 households currently accepted as homeless and placed in temporary accommodation.  At the same time the council has 1239 empty properties, of which 197 would be liable to pay an additional premium due to the period that they have remained empty.

 

·         The council has a dedicated empty homes officer within the housing service whose role is to advise and assist owners of empty homes. In addition the council has an empty homes policy that sets out the range of interventions provided by the council to help bring properties back into use.

 

1.4        Alternative Action and why not Recommended

 

1.4.5   The council could decide not to apply a premium or apply a premium at a lower rate (between 0 -50%).  In taking such action the council would limit the impact on the change both in terms of properties being returned to use and financial benefit to the council and wider council tax payer.

 

1.5        Impact on Corporate Objectives

 

1.5.1 Introduction of the change will support the council’s objective to provide decent, affordable housing in the right places across a range of tenures by encouraging the use of properties that have been empty long term.

 

1.6        Risk Management

 

1.6.1   The proposed changes are intended to reduce the number of empty properties within the borough, increasing the stock of available housing.  The income generated through the addition of an empty homes bonus will therefore reduce as the number of empty properties declines, however the increased tax base will continue to generate funding for the council.

 

 

 

1.7        Other Implications

 

1.7.1    

1.      Financial	X
2.           Staffing
3.           Legal
4.           Equality Impact Needs Assessment	X
5.           Environmental/Sustainable Development	X
6.           Community Safety
7.           Human Rights Act
8.           Procurement
9.           Asset Management

 

 

1.7.2   Financial – the change is expected to provide additional council tax

of £76,000.  Through discussion with Kent County Council it has been agreed that the Borough Council will be able to retain a greater proportion of the overall revenue generated in recognition of the additional administration involved in making such a change and collecting any additional revenue.

 

Maidstone borough council will therefore receive additional income through council tax of £25,000.

 

Where the change results in a property being returned to use the Council will receive additional funding through New Homes Bonus, with an award of approximately £1,200 per property for 6 years.

 

1.7.3 Equality Impact Needs Assessment - To assist Members in having due and full regard to their responsibilities under the Public Sector Equality Duty, an equality impact assessment has been completed which shows that the proposed changes are not expected to have a negative impact.  Further detail can be found at Appendix A. 

 

1.7.4 Environmental/Sustainable Development – The change will positively encourage properties in a poor state of repair to be brought back into a state of repair to enable occupation.

 

1.8        Conclusions

 

1.8.1 The ability for the Council to change the level of council tax payable for empty properties within the borough is an important step in both reducing the number and period for which properties remain empty.  It also provides an important source of revenue given the current pressures on local government finance.

 

1.8        Relevant Documents

 

1.8.2   Appendices

 

Appendix A – Equality Impact Assessment

 

1.8.3   Background Documents

 

None

 

IS THIS A KEY DECISION REPORT?                  THIS BOX MUST BE COMPLETED     Yes                                               No     If yes, this is a Key Decision because: Policy change impacting on all wards. .     Wards/Parishes affected: All ..   ..