Issue - meetings

Report of the Cabinet Member Finance

The Cabinet Member Finance reminded Members that councils had discretionary powers to set the level of council tax discount on empty properties and CBC had already used its discretionary powers in respect of empty properties and second homes as detailed in appendix 2.  She explained that in December 2017 the Council agreed to charge the 50% empty homes premium in respect of properties which had been empty and unfurnished for more than 2 years from April 2018. She reported that new legislation had now come in to force extending discretionary powers to increase the level of premium from April 2019. The rating allowed the following :

·         From 1st April 2019 - 100% premium, 200% council tax liability, for properties which have been empty for 2 years or more

·         From 1 April 2020 - 200% premium, 300% council tax liability, for those properties which have been empty for 5 years or more

·         From 1 April 2021 300% premium, 400% council tax liability, for those properties which have been empty for 10 or more

The Cabinet Member informed that in October 2018, 119 properties in Cheltenham had been empty for more than 2 years and were subject to the premium. In October 2017 the number of properties which had been empty for more than 2 years was 80. She explained that based on the 119 properties and the council tax level for 2018/19, increasing the premium to 100% in 2019/20 would increase council tax income by approximately £12,000 for this Council. The Government had reported that nationally, where councils had been charging the premium consistently year on year, there had been a significant reduction in the number of homes being charged the premium.  Whilst Cheltenham’s scheme had been running for just nine months she informed Members that since April 2018 25 properties that were charged the premium had become occupied.

The Cabinet Member reported that two letters of representation had been received from investors at Honeybourne Gate and one from the managing agent requesting that in their particular circumstances consideration be given to exempting them from the scheme. She explained that whilst appreciating the particular investment difficulties these investors found themselves in, the potential reward needed to be considered against any risks and when considering these letters Cabinet believed it would be difficult to make an exception in this case. All Members of Council had received a copy of these letters and she requested that they should also give consideration to the requests.

The Cabinet Member noted that a certain level of empty homes was inevitable and was a feature of a healthy housing market, however properties which had been empty and unfurnished for 2 years or more were often subject to deterioration that could affect the fabric of the property and could cause damage to neighbouring homes. With increased pressure to find housing for people in need homeowners should be encouraged to bring long term empty homes into use to the benefit of all residents. Increasing the empty homes premium to  ...  view the full minutes text for item 9

Report of the Cabinet Member Finance

RESOLVED THAT

Council be recommended to :

a)    Increase the Council Tax Empty Homes Premium to 100% from 1st April 2019 in respect of properties which have been unoccupied and unfurnished for more than 2 years

b)    Increase the Premium for those properties which have been empty for 5 years or more to 200% from April 2020

c)    Increase the Premium for those properties which have been empty for 10 years or more to 300% from April 2021

The Cabinet Member Finance reminded Members that council had discretionary powers to set the level of council tax discount on empty properties and CBC had already used its discretionary powers to set discount levels in respect of empty properties and second homes as detailed in appendix 2. In December 2017 the Council agreed to charge the 50% empty homes premium in respect of properties which have been empty and unfurnished for more than 2 years from April 2018. She reported that new legislation had now come in to force extending discretionary powers to increase the level of premium from April 2019. The rating allowed the following :

•From 1st April 2019 - 100% premium, 200% council tax liability, for properties which have been empty for 2 years or more

•From 1 April 2020 - 200% premium, 300% council tax liability, for those properties which have been empty for 5 years or more

•From 1 April 2021 300% premium, 400% council tax liability, for those properties which have been empty for 10 or more

The Cabinet Member informed that in October this year, 119 properties in Cheltenham had been empty for more than 2 years and were subject to the premium. In October 2017 the number of properties which had been empty for more than 2 years was 80.

She explained that based on the 119 properties and the council tax level for 2018/19 increasing the premium to 100% in 2019/20 would increase council tax income by approximately £12,000 for this Council. Although the number had increased in Cheltenham over the past year the Government had reported that nationally, where councils had been charging the premium consistently year on year, there had been a significant reduction in the number of homes being charged the premium.

The Cabinet Member highlighted the importance of encouraging empty homes being brought back into use, more so than the generation of additional council tax income. She then made reference to two letters of representation from investors at Honeybourne Gate and one from the management company requesting that in their particular circumstances consideration be given to exempting them from the scheme. Whilst appreciating the particular difficulties they found themselves in, the potential reward needed to be considered against any risks. She therefore believed it would be difficult to make an exception in this case and invited Cabinet to share their views.

Members felt strongly that whilst recognizing the important role the private rented sector played locally, in view of the housing crisis it was unacceptable that significant sums of money were being invested in properties in the town and then were being left empty. Introducing a maximum premium on empty properties would be a significant incentive for those investors anticipating an increase in market value. Members supported the view that the additional income, albeit small, was to be welcomed but more so was the opportunity it now had to bring empty properties back into use.

The Leader supported the proposals and welcomed this serious tool it now  ...  view the full minutes text for item 9