Agenda item

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 the maximum allowed would therefore send a clear message to owners that it was not acceptable to keep properties empty for long periods.

Members discussed the proposal and the following points were raised and responses given :

The premium would apply to Cheltenham Borough Homes properties. There were currently 33 CBH properties which qualified as long term empty. The Cabinet Member Housing highlighted that this figure represented less than 10 % of the housing stock and most of them were uneconomic to repair and therefore let. CBH and CBC were however working hard on the regeneration of whole areas and this was considered a priority.

Whilst Members were sympathetic to the representations regarding Honeybourne Gate any investment had a risk and these properties were currently out of the reach of a significant number of people. It was therefore felt that no exemption should be granted.

The Cabinet Member clarified that flats above shops which were accessed separately would be subject to the premium.

Members wholly supported the proposals, it was important empty properties were brought back into use and the council should do the maximum it could to do this. Members felt that it was a scandal that any property was being deliberately left empty when there was significant housing need in the town. This proposal would send out the right message; it was not so much about income generation for the council but about bringing back into use empty properties.

RESOLVED (unanimously) THAT

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

2.    From April 2020 the Premium for those properties which have been empty for 5 years or more be increased to 200%

3.    From April 2021 the Premium for those properties which have been empty for 10 years or more be increased to 300%