Since April 2013 Local Authorities in England have been given delegated powers under Section 11B of the Local Government Finance Act 1992. This allows them to increase the Council Tax charge by up to 150% on some long-term empty properties.
From 01 April 2018 it had been proposed that this will increase to a maximum charge of 200%. Legislation is currently going through parliament for this change
however unless the current wording is changed the increase must be implemented before the start of a Council Tax year, therefore this increase wouldn’t be implemented until 01 April 2019 and the draft bill confirms the start date of 01 April 2019 for the 200% figure.
What is the Council Tax long term empty property premium for ?
The Council Tax Empty Property Premium was introduced by Parliament as an ‘incentive’ to push empty property back in to use and local authorities quickly jumped on the chance of the extra income. It’s not always possible however for owners to do so and they end up paying the extra on a property from which they receive no income.
The Premium applies to any property in England which has been both unoccupied and substantially unfurnished for a period of 2 years or more and is in addition to the normal Council Tax charge due on the property:
It should be noted that the Long Term Empty Premium is a different system to that offered by a Local Authority in respect of a discount on property which unoccupied for, relatively, short periods of time.
A Band A property pays £1000 per year and is left unoccupied, but furnished, on 01 April 2015.
If it remains unoccupied then on 01 April 2017 the charge can increase to 150%, £1500 per year.
and, under the proposed scheme,
*If it continues to remain unoccupied then under the proposed legislation the charge can increase to 200%, £2000 per year.*
Independent of the Owner
The Council Tax Empty Property Premium is based on the property and is independent of the owners. This means that the you can purchase a property and become liable for the Empty Property Premium if it has already been unoccupied and substantially unfurnished for more than 2 years (or at a later date if it reaches a 2 year period of being unoccupied and substantially unfurnished).
Once of the reasons for the Council Tax Empty Property Premium being independent of the owner is to stop ownership being transferred to avoid the charge.
Can I contest it with a Valuation Tribunal or Ombudsman?
If the Local Authority has made the decision to apply Empty Property Premiums within their area then a Valuation Tribunal have no powers to question this decision. A Valuation Tribunal can intervene, under Section 16 of the Local Government Finance Act 1992, if the property has been wrongly attributed to being a long-term empty property (and therefore it doesn’t fall within the relevant criteria).
The Local Government Ombudsman cannot become involved in situations where the Valuation Tribunal has jurisdiction – for example liability disputes or discount/exemption entitlement. They can only get involved where an issue has been raised with the Local Authority and their complaint process has been utilised without you being satisfied with their reply. They are unable to rule on a decision where it has been made under legislation but they may be able to help with other issues, such as delays in the Local Authority dealing with your case or making errors whilst doing so.
A legal way around the increase !
The current legislation requires that a property is both unfurnished and substantially unfurnished – if it does not meet both of these conditions the long term empty premium cannot apply. If a property has to be left unoccupied long-term then the property should ideally be left substantially furnished where possible as this will avoid the increase becoming due.
Section 13A Council Tax reductions
Where a person is in hardship due to paying a Council Tax charge then they have the legal right to make a request under Section 13A of the Local Government Finance Act 1992 (as amended) for the balance to be reduced or written-off. This request has to be considered and is subject to a Valuation Tribunal appeal.
Advice & Assistance from LGFA92
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Contact us today. Email us at firstname.lastname@example.org, Call our Council Tax helpline on 0191 6451118.
This article is solely the view of LGFA92, the Council Tax experts, based on our interpretation of legislation. Your local authority is free to dispute this view. A binding decision may require the intervention of a valuation tribunal.