Report of the Deputy Chief Executive and City Treasurer attached

The Executive considered a report of the Deputy Chief Executive and City Treasurer, which proposed changes to the Council Tax premium charged on empty unfurnished and furnished properties.

The Executive Member for Finance and Resources explained that from April 2013, the Council had been allowed to charge an additional premium on homes that had been empty and unfurnished for more than two years.  Initially the premium was 50%, but in 2019, after further legislation, the current regime was introduced where the Council charged a 100% premium after two years, a 200% premium after five years and a 300% premium after ten years.  Also from April 2013, the Council removed the 50% open ended discount on empty, furnished properties, replacing it with a one month, 100% discount to allow landlords time to do necessary repairs between tenancies. This was removed by the Council in 2019, meaning no discount was available to owners of empty, furnished properties.

In  February 2023 the decision was taken to adopt the new powers made available in the Levelling up and Regeneration Act 2023, which woud come into force as of April 2024 and would allow the Council to charge the long-term empty premium of up to 100% after one year instead of the current two-year timespan, from 1 April 2024. It also allowed the Council to charge a premium of up to 100% on empty, furnished properties from April 2025, including second homes.

The focus and rationale behind these changes was to encourage owners to bring properties back into use more quickly to address housing shortages that have been well reported.

In February 2023, there were 733 properties that had been empty and unfurnished for between one and two years. It was estimated that applying the premium after one year instead of two would create additional Council Tax liabilities of £1.3 million. By September 2023, the number of empty properties in this category had reduced to 604 properties reducing the estimated increase in Council Tax liabilities to £1.1 million, of which an estimated £0.8m would be retained by the Council.  In addition, n February 2023 there were 5,371 properties that were empty and furnished, split almost 50/50 between those empty for more than a year and those empty for less than a year . By September 2023, the 12 month average number of empty properties in this category had reduced to 5,057 properties producing an estimated increase in Council Tax liabilities of £7.2 million, reflecting the Council’s share only.  However, this would be significantly reduced because properties owned by Registered Social Landlords would be exempt from this premium.

The proposals had been considered by the Resources and Governance Scrutiny Committee at its meeting on 11 January 2024, where the recommendation was fully endorsed.

Decision

The Executive agree that the Council will adopt the new powers allowed by the Levelling up and Regeneration Act 2023 in order to:

·                Charge the long-term empty premium after one year instead of two years from 1 April 2024.

·                Charge a 100% premium on empty furnished properties, subject to any future guidance or regulations from Central Government from 1 April 2025.