Wednesday, 20 October 2010

New research reveals Council's who provide Council tax discount's to owners of Empty Homes

There are 770,000 empty homes vacant. Long Term (over 6 months) and Short Term (under 6 months)

Many of these absent owners can claim 50% Council Tax discount (long term only) from their local authority. LA’s set discount levels but national Government pays as they are removed from the Council Tax base and the formula grant settlement.

If Councils remove the discount, they do not benefit. A new Council Tax base lowers the formula grant.

Perversely LA’s owning empty properties end up paying the government through decreased formula grant and an increased council tax liability.

A discouragement to areas in need of regeneration trying to disincentivise empty properties and LA’s trying to CPO or regenerate areas.

The situation became unclear when 3 year agreed local government funding settlements were established.

A discount that encourages them to hold on to them despite a chronic shortage of affordable housing and despite the criminal and environmental problems they attract.

The Empty Homes Agency is campaigning to have this discount removed and the debate now is about allowing local authorities to charge a premium (say 125%) to offset the costs of dereliction.

Of the 362 local authorities in the table attached, 117 allow the maximum50% discount, 5 allow a 25% discount, 46 allow a 10% discount and 194 have removed any discount at all.

Most of the 770,000 are Band A. In Hyndburn two thirds receive the discount. The gross council tax receipt on those 1300 long term voids would be (removing a 50%) £660,000. However 85% of those increased council tax receipts would go to the shire authority.