Agenda item

Report of the Cabinet Member for Finance and Assets, Councillor Peter Jeffries

The Cabinet Member for Finance and Assets introduced his report by saying that with the continuing housing crisis, this administration using the tools at its disposal to bring empty homes back into use, including our discretionary powers to levy council tax on long term empty properties. The current level of  premium and number of properties is set out in the report, and changes to the relevant acts of parliament mean that we can now charge the premium after a property has been empty for one year, instead of two.

He said that there is also a new power afforded to councils through these changes, allowing them to charge a premium for second homes, previously not an option due to a loophole in the legislation which classed a furnished long-term empty home as a second home, thus circumnavigating the empty homes premium.

Whilst accepting that the majority of Cheltenham’s current 963 properties classed as second homes are not long-term empty, the changes in the legislation are to be welcomed, and should encourage all owners of second homes to consider freeing them up. Taking this decision now means the council will be prepared and able to be proactive when the changes can take effect from April 2025.

He went on to explain that the full council tax charge applies to second homes. In the legislation, the charge is 50% and the council currently has the discretion to increase this to 100%, which it has been doing since 2004.  The 100% premium is on top of the full charge, so from April 2025, second  homeowners will be paying 200%.

-        100% premium means 2 x council tax  

-        200% premium means 3 x council tax

-        300% premium means 4 x council tax

He said the new exemptions from the premium with the usual full council tax will still be payable, but he was confident that the exemptions will mostly be time limited. There will be an exemption for properties undergoing probate and for a period after probate has been granted, and most likely be an exemption where the property is actively being marketed for sale or rent but hopefully this will be limited to three months. These new exemptions will apply to both the second homes and the empty homes premium. 

He reminded Members that there are already a number of existing council tax exemptions (such as student properties or where the resident has gone in to a care home) but these are completely separate and don’t apply to properties that are subject to a premium.  He ended by saying that empty homes and second homes do not positively contribute to community cohesion, and he hoped that Members would support the recommendations.

The Cabinet Member for Climate Emergency welcomed the freeing up of more properties, but wanted to be sure that anyone who had lost a family member whose property remained in probate for a long time would not be penalised by the second home strategy.  The Cabinet Member for Finance and Assets fully expected an exemption for such a case, to be confirmed with officers.

The Cabinet Member for Housing suggested that it would be useful to understand the exemptions, as there could be many reasons why someone can’t sell a property straight away and end up owning two properties, although with the new policy not coming into force until April 2025, there is time for anyone in this situation to be encouraged to release the second property for a different resident.

The Cabinet Member for Economic Development, Culture, Tourism and Wellbeing also welcomed the report and change in legislation, in view of the massive housing crisis.  He said there are not enough houses in Cheltenham, people struggle to get onto the housing ladder, with large numbers of homeless and hidden homeless people, and it is disappointing and a moral issue that people with more than one home leave them empty, sometimes for a long time. The potential flow of extra revenue from these changes is less that £200k, but it is important to  prompt people who are tempted to leave properties empty to do the right thing and bring them back into use.  He hoped further legislation will follow.  

RESOLVED THAT: 

1.    Council is recommended to approve the change to the Empty Homes Premium so that properties which have been unoccupied and unfurnished for one year, instead of two, will become subject to the 100% premium from April 2025.

2.    Council is recommended to approve the implementation of the 100% Second Homes Premium from April 2025.

3.    Council is recommended to give delegated authority to the Executive Director for Finance Assets and Regeneration in consultation with the Cabinet Member Finance and Assetsto amend the policy so that it meets the requirements of any guidance/ regulations due to be issued by Government and to ensure the premiums are administered efficiently.