Agenda item

Report attached.

Members considered a report of Councillor Peter Britcliffe, Deputy Leader of the Council and Portfolio Holder for Resources, seeking to further the Council’s strategy to improve its housing stock and the regeneration of Hyndburn by adopting new Government provisionson premium rates of Council Tax in the following circumstances:

 

(i)            for properties that were left vacant for over one year; or

(ii)           for properties classed as second homes.

 

Councillor Britcliffe outlined the main purpose of the report and highlighted that 250 properties were currently empty, and would be subject to a 200% Council Tax liability in April 2024 if, following implementation of these recommendations, they remain unoccupied.

 

Councillor Kath Pratt suggested that the impact of the revised Policy should be carefully monitored and that a review of the effects of its implementation should take place after six months.  Members agreed to consider this suggestion within the recommendations.

 

Approval of the report was not considered to be a key decision.

 

Reasons for Decision

 

The national problem of a housing shortage and many existing properties that were empty was well documented.  Hyndburn had historically suffered from a higher than normal percentage of empty properties, many being left vacant for long periods and blighting their neighbourhoods.  The Council had attempted to address the number of empty properties for a considerable time as part of its efforts to regenerate Hyndburn and provide better places to live. The Council had welcomed and had acted upon the Government’s initial introduction of a premium on Council Tax in 2013 for long term empty properties, as a means of encouraging their occupation, together with the incremental changes effective from April 2019.  While the initial Government legislation that had taken effect in 2013, and subsequent legislation in 2019 had helped reduce the number of empty properties, there were still over 800 empty properties that remained in Hyndburn that caused damage to the local housing market and neighbourhoods.  The Council was therefore proposing to introduce the new Government rules fully, to further help reduce the overall number of empty properties.

 

The Local Government Finance Act 2012 had granted local authorities greater flexibility over certain Council Tax discounts and exemptions from April 2013.  In January 2013, Cabinet had approved the Council’s proposal to implement changes to empty property discounts and changes had been made to the following percentage rates of normal Council Tax liability:

 

Table 1 – Empty Property Liabilities implemented in 2013

 

Properties which are empty and substantially unfurnished
	Pre-2013	From April 2013
Up to 6 months	0%	50%
From 6 months to 2 years	50%	100%
From 2 years	50%	150%
Properties which are empty and in need of or undergoing major repair
	Pre-2013	From April 2013
Up to 6 months	0%	50%
From 6 months to 2 years	50%	100%
From 2 years	50%	150%

 

 

Owners of properties being actively marketed for sale or rent could apply to have the premium rate reduced to 100% of normal Council Tax liability.

 

Since 2013, the number of properties in the Borough classified as empty and unfurnished for Council Tax purposes on 1^st April each year had reduced as outlined in Table 2 below.  It should be noted that these figures represented those dwellings subject to former Class C empty and unfurnished discounts, not all empty dwellings in the Borough.  Other empty properties included those undergoing major repairs and those subject to other exemptions.

 

Table 2 – Council Tax Empty Properties from 2012/2013 to 2022/2023

 

Financial Year	0-6 months	6-24 months	24+ months	Total
2012/2013	746	1275*	-	2021
2013/2014	593	751	593	1937
2014/2015	596	609	368	1573
2015/2016	576	523	357	1456
2016/2017	585	399	278	1262
2017/2018	437	553	252	1242
2018/2019	432	486	276	1194
2019/2020	489	442	243	1174
2020/2021	459	458	207	1124
2021/2022	193	364	193	750
2022/2023	258	372	166	796
2023/2024	225	411	166	802

 

 

The measures introduced to incentivise re-occupation or sale of empty property had been combined with other regeneration efforts, the work of the Council’s Empty Properties Officer and work to survey and monitor empty properties each year since 2013.

 

Overall, the implementation of the Council Tax premium on empty properties could be said to have had a positive impact on the number of empty dwellings in the Borough, had supported the Council’s regeneration efforts and had helped to increase the Council’s New Homes Bonus allocations.

 

New Legislation

 

From April 2024, the Levelling Up and Regeneration Act 2023 amended section 11B of the Local Government Finance Act 1992 and granted local authorities the discretion to apply Council Tax premiums on empty dwellings that had been empty for one year.

 

The new legislation provided that the applicable premium and incremental implementation as follows:

 

Table 3 Empty Property Charges from April 2024

 

Duration	Amount
Up to 6 months	50% of normal liability
From 6 months to 1 years	100% of normal liability
From 1 years to 5 years	200% of normal liability
From 5 years to 10 years	300% of normal liability
From 10 years	400% of normal liability

 

 

The increased premiums that would apply from April 2024 could apply to any empty property which became empty at any time; the date of last occupation did not have to fall within the period of the amended premiums and, as such, some currently empty properties would fall into the increased premium categories immediately.

 

Currently, there were 250 properties which were empty and, if they remain unoccupied at April 2024, would be subject to a 200% Council Tax liability in 2024, if these measures were introduced.  Of these properties 193 (74%) were in Band A, with 57 properties in Bands

B – G.

 

Table 4 – Second Home Charges from April 2024

 

Duration	Amount
Second Home	100% of normal liability

 

 

The Levelling Up and Regeneration Act 2023 inserted section 11C of the Local Government  Finance Act 1992 and granted authorities the discretion to apply higher amounts for properties that were occupied periodically (Second Homes).

 

Table 5 – Second Home Charges from April 2025

 

Duration	Amount
Second Home	200% of normal liability

 

 

Currently there were 20 properties which were classed as second homes and, if they were classed as such at April 2024, they would be subject to a 200% Council Tax liability in 2025, if these measures were introduced.  This was because, in relation to the changes for second homes, a billing authority would have to allow at least one year before the beginning of the financial year to which it related.  As such, the first financial year for which the premium could be applied to property classed as a second home would be from 1^st April 2025.

 

Implementation

 

Should these measures be implemented, the Council was required to publish its intentions in at least one local newspaper at least 21 days prior to implementation.

 

In addition, it was the service’s intention to write to all owners of empty properties and second homes to inform them of the increased premiums and the timescale for implementation, allowing them the opportunity to sell or occupy any empty properties they might have prior to any further premiums being applied.

 

The Council would review the administration of this policy in accordance with any guidance, as issued, by the Secretary of State

 

The report included a number of Appendices, which comprised the following:

 

• Appendix 1 - Council Tax Empty Property Liability Policy;
• Appendix 2 - Council Tax Premium Reduction Application Form
• Appendix 3 - Council Tax Discount Application Form (Major Structural Repairs)
• Appendix 4 – Customer First Analysis

 

Alternative Options considered and Reasons for Rejection

 

Do Nothing - The new legislation provided local authorities with the discretionary power to apply premiums to empty properties and there remained the option to retain the premium levels currently applicable or to delay the implementation of further premiums.

 

Alternative premium levels - Having considered the positive contribution that the existing premium had made towards bringing empty properties back in to use, it was recommended that the new premium structure be applied in full up to the maximum levels.  Provisions remained within existing policy and legislation to lower the premiums if properties were being actively marketed for sale or rent, as well as discretionary powers to remit Council Tax liabilities in exceptional circumstances.

 

Resolved                                 (1)   That the revised Council Tax Empty Property Liability Policy, attached as Appendix 1 to the report, is approved and the empty property premiums, and, premium for property classed as a second home, are revised as set out in Paragraphs 3.10 to 3.16 of the report in accordance with the provisions in the Rating (Property in Common Occupation) and Council Tax (Empty Dwelling) Act 2018, and the Levelling Up and Regeneration Act 2023

 

(2)     That a review of the effects of the implementation of the above Policy should take place after six months.