Since April 2013 Local Authorities in England have been given delegated powers under Section 11B of the Local Government Finance Act 1992 to increase Council Tax on a local level. These powers allow them to increase Council Tax by adding up to 50% to the Council Tax charge on some long-term empty properties. This is commonly known as the ‘Empty Property Premium’ or ‘ Long Term Empty Premium’.
From 01 April 2019 legislation will allow an increase in the premium to a maximum of 100%. Over time this maximum will increase to 300%
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 get a property back in to use quickly and they can 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:
A Band A property pays £1000 per year and is left unoccupied, but unfurnished, on 01 April 2016.
If it remains unoccupied & substantially unfurnished then on 01 April 2018 the charge can increase by 50% to £1500 per year.
From 01 April 2019 new legislation will increase the Premium which can be charged:
- From 01 April 2019 the basic premium can be increased from 50% to 100%
- From 01 April 2020 the premium can be increased to 200% where the property has been empty for 5 years or more.
- From 01 April 2021 the premium can be increased to 300% where the property has been empty for 10 years or more.
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.
Is my premium correct ?
The current legislation sets down specific criteria in respect of how and when the council tax premium applies. There are ways in which the increase may be mitigated and LGFA92 are able to provide both advice on this mitigation and the correct application of the premium.
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.
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This article is solely the view of LGFA92, the Council Tax agents and 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.