Report of the Head of Corporate Revenues.

This report provides an overview of and update on new powers provided by legislation to increase the Council Tax on empty properties.

The committee considered a report of the Head of Corporate Revenues which provided an overview of and update on new powers provided by legislation to increase the Council Tax on empty properties.

Key points and themes within the report included:

• New powers under the Levelling Up and Regeneration Act 2023 stipulated that:

o   Empty, unfurnished properties would pay the 100% long term empty premium after one year instead of two years from 1 April 2024.

o   Empty, furnished properties would pay up to a 100% premium from the date that they became empty from 1 April 2025.

• Consultation on these proposals was undertaken as part of the 2023 budget consultation;
• The financial implications of applying the premium;
• Safeguards in place, such as the Discretionary Council Tax Payment scheme; and
• A further report would be brought to Resources and Governance Scrutiny Committee and Executive in advance of introducing the new policy for empty and furnished properties from 1 April 2025.

Some of the key points and queries that arose from the committee’s discussions included:

• If the Council collected council tax on properties that were empty whilst under probate and, if so, whether any discretion could be applied in such circumstances;
• Whether modelling had been undertaken of the anticipated savings as a result of increasing the premium; and
• How the new powers would drive behaviour change from owners of empty properties.

The Executive Member for Finance and Resources introduced the report and explained that the Levelling Up and Regeneration Act 2023 had been delayed and was passed in late October 2023. He stated that the increased premiums would bring in much-needed revenue for Manchester and that it enabled the Council to encourage homeowners to bring empty properties onto the market much sooner which would help to address the challenge of the housing crisis.

The Head of Corporate Revenues advised the committee that the changes would hopefully lead to behavioural change from owners of empty properties and explained that these premiums did not apply to empty properties of Registered Social Landlords.  He also explained that guidelines were expected from the government which could inform the approach to empty properties which were for sale and rental properties vacant between tenancies.  The committee was also informed that the New Homes Bonus applied to each empty, unfurnished property that was brought back onto the market.

In response to members’ queries regarding empty properties under probate, the Head of Corporate Revenues advised that there were specific rules in these circumstances and that these tended to be exempt from the premium until probate was awarded. Further information on this would be shared with members following the meeting.

The Deputy Chief Executive and City Treasurer reiterated the importance of behaviour change as a result of the increased premium and the number of empty properties brought back into use would be monitored.

The Head of Corporate Revenues clarified that a behaviour change would involve empty property owners reletting properties and reducing the small number of ‘phantom tenancies’.

Decision:

That the committee endorse the recommendations to the Executive.