Westminster Blog

The BBC reported last week that Camden was set to become the first London council to get rid of council tax discounts on second homes.

The plans were agreed by the borough’s cabinet at a meeting on Wed 5 Dec and will be decided at the full council meeting on 21 January.

The changes include:

· Owners of empty habitable homes were previously exempt from council tax for six months. This will be replaced by a discount of 100% for the first month and the full charge payable after that.

· Further changes will see the exemption period of 12 months that was previously available to owners of empty uninhabitable property replaced with a discount of 25% for 12 months.

· The discount available to second home owners and landlords of furnished properties was previously 10% but the full charge will now be payable.

We’ve called around the country and it turns out that similar moves are afoot in local authorities everywhere; including Southwark, Cornwall, South Hams, Suffolk Coastal, Kensington & Chelsea, North Devon etc.

As a result, 100s of thousands of people who own second homes or empty homes face a rise in their council tax bills.

At present there are 255,000 properties which attract a lower rate because they are classed as second homes, with discounts of 10 to 50 per cent. There are another 259,000 “long-term empty” properties which also enjoy exemptions including, typically, no payment for the first six months after falling vacant and – after that – a discount of up to 50 per cent.

The government has given authorities the freedom to remove these discounts as part of the changes to council tax benefit, which will see administration shifted from Whitehall to the authorities (along with a 10 per cent cut in funding).

Not only are most councils getting rid of the discounts for second homes. Some plan to go further and charge a punitive extra 50 per cent council tax on homes left vacant for the long-term; usually defined as two years.

That is taking place in Camden, where the Labour council plans an extra 50 per cent charge on homes empty more than 24 months.

There are 103,800 residential properties in the borough and most of these are occupied by residents as their main home. However one in 14 homes are not lived in on a full time basis and 6,717 will be subject to the changes in council tax charging.

Theo Blackwell, cabinet member for finance, said he believed the changes were “fair and necessary measure” in the light of cuts by central government.

“Camden has a severe shortage of housing, yet every year thousands of properties are left vacant by private landlords and second homes continue to enjoy a tax break. We plan to use new powers to end these perks,” he said.

Tory-run Westminster, by contrast, is taking a rather different approach. It is ending the 10 per cent discount for second homes. But while Westminster will charge full council tax for empty properties it is not introducing an extra “penalty” charge.

Melvyn Caplan, Westminster’s cabinet minister for finance, predicted there could be difficulties raising such a levy.

“We think that charging more than 100 per cent is penalising people, given that council tax is meant to be a charge for services you receive,” he said. “Plus you could waste a fortune trying to find out if properties are empty or not.”