Empty Homes Charging Policy

1. Introduction

1.1. The Local Government Finance Act 2012 amended the Local Government Finance Act 1992 allowing local discretion over the implementation of certain discounts in place of statutory exemptions and also allows for the use of premiums for certain long term empty premises.

The intention of Central Government is to allow Councils the flexibility in raising additional Council Tax.

In addition, Government is keen to ensure that premises do not remain unoccupied or unused for extensive periods and to encourage the maximum use of all available premises within Council areas.

2. Legislation

2.1. The relevant legislation is as follows:

• Section 11a Local Government Finance Act 1992 - Power to determine further discounts for certain dwellings;
• Section 11b Local Government Finance Act 1992 - Higher amount for long-term empty dwellings: England;
• The Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2003 as amended by The Council Tax (Prescribed Classes of Dwellings (England) (Amendment) Regulations 2012; and
• The Council Tax (Exempt Dwellings) (England) (Amendment) Order 2012
• The Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018
• The Levelling-up and Regeneration Act 2023

2.2. In addition to the amended legislation, Central Government has provided a number of documents to assist local authorities in the implementation of these additional powers:

• Technical Reforms of Council Tax - A consultation
• Technical Reforms for Council Tax - A summary of responses;
• Council Tax Information Letter: Council Tax - Definitions of Empty Homes and Second Homes;
• Council Tax - Empty Homes Premium - Guidance - for properties for sale and letting.

3.0. The Charging Policy

3.1. Council approved the following changes to Council Tax exemptions, discounts, long term empty properties and second homes with effect from 1 April 2013 by:

(i) replacing the exemption of up to twelve months with a discount of 50% for a period up to twelve months for properties where major repairs or structural alterations are required, underway, or recently completed (Class A);

(ii) replacing the six months exemption for empty homes with a 100% discount for two months, followed by a discount of 50% for the next four consecutive months (Class C - empty and unfurnished);

(iii) revoking the 50% discount for empty homes after six months and levy a premium of an additional 50% of Council Tax due on properties that have been empty and unfurnished for at least two years, subject to any statutory exemptions and any local discretions;

(iv) revoking the 10% discount on second homes;

3.2. Council approved further changes to the Charging Policy with effect from 1 April 2018, by:

(i) replacing the two months exemption for empty homes with a 100% discount for one month only. (Class C - empty and unfurnished);

3.3. Further changes were then introduced by Council on an incremental scale, with effect from 1 April 2019.

The full details of these charges can be seen in the table below, showing how a property is affected from the date it becomes empty:

3.4. Further changes were then introduced by Council on an incremental scale, with effect from 1 April 2024 for empty properties and 1 April 2025 for unoccupied and furnished including second homes.

The full details of these charges can be seen in the table below, showing how a property is affected from the date it becomes empty:

4. Background Information

4.1 Empty dwelling, requiring or undergoing structural alterations or major repair works to make it habitable

4.1.1 The requirement is that the dwelling is vacant and:

• requires or is undergoing major repair work to render it habitable, or
• is undergoing structural alteration; or
• has undergone major repair work to render it habitable, if less than six months have elapsed since the date on which the alteration was substantially completed and the dwelling has continuously remained vacant since that date;

4.2 Empty Dwellings

4.2.1 - An empty dwelling is one which is unoccupied and substantially unfurnished.

4.2.2 - A discount or exemption applies from the date the property became empty and not from the date the liable person becomes responsible for the property.

For example, in the case of new, empty and unfurnished properties:

• The property became empty on 1 January
• The property was sold 15 June

The liable persons would be entitled to:

• a 100% discount from 1 January to 1 February
• a full 100% charge from the 1 February

An additional Premium of 100% would be incurred one year after 1 January if the property remains empty, subject to locally determined exceptions.

4.2.3 - In considering whether a dwelling has been vacant for any period, any period of occupation not exceeding six weeks, shall be disregarded.

4.2.4 - Newly built dwellings fall to be considered in this category should they remain empty after the specified completion date. In these circumstances the discount will apply from the completion date as specified in the completion notice issued by the billing authority.

4.3 - Empty Homes Premium - Long Term empty dwellings

4.3.1 - A long term empty dwelling is one that has been vacant in excess of one year and as such is liable to an Empty Homes Premium in addition to the 100% charge already levied in respect of empty premises, subject to statutory exemptions and locally determined exceptions (please view - Appendix A).

4.3.2 - Effective from:

Pre 1 April 2019

A 50% premium is levied on properties that have been empty and unfurnished for at least two years, subject to statutory exemptions and locally determined exceptions.

From 1 April 2019 to 31 March 2024

A 100% premium is levied on properties that have been empty and unfurnished for at least two years, subject to statutory exemptions and locally determined exceptions.

From 1 April 2020

A 200% premium is levied on properties that have been empty and unfurnished for at least five years, subject to statutory exemptions and locally determined exceptions.

From 1 April 2021

A 300% premium is levied on properties that have been empty and unfurnished for at least ten years, subject to statutory exemptions and locally determined exceptions.

From 1 April 2024

A 100% premium is levied on properties that have been empty and unfurnished for at least one year, subject to statutory exemptions and locally determined exceptions.

From 1 April 2025

A 100% premium is levied on second homes, subject to statutory exemptions and locally determined exceptions.

4.3.3 - The policy aim is to encourage owners to bring empty properties back into use quicker, at a time when there is an overall housing shortage and social housing waiting lists.

The Government considers that long-term empty properties attract squatters, vandalism and anti-social behaviour, and are a blight on the community.

4.3.4 - Liability for the Empty Homes Premium is determined by the length of time that the property has been empty.

An individual who purchases a property, which has already been empty for one year, may be required to pay the premium as soon as they take ownership, subject to statutory exemptions and local exceptions.

A period of occupation of over six weeks qualifies as a break in the empty period, 'resetting the clock' for the purposes of the Empty Homes Premium.

4.3.5 - Statutory Exceptions

Six classes of property are exempt by statute from the Long Term Empty Homes Premium as detailed below:

• A dwelling which is or would be someone's sole or main residence if they were not residing in job related armed forces accommodation. (Class E)
• Annexes forming part of, or being treated as part of, the main dwelling. (Class F)
• Dwellings being actively marketed for sale (12 months limit). (Class G)
• Dwellings being actively marketed for let (12 months limit). (Class H)
• Unoccupied dwellings which fell within exempt Class F and where probate has recently been granted (12 months from grant of probate/letters of administration. (Class I)
• Empty properties requiring or undergoing major repairs or structural alterations (12 months limit). (Class M)

Eight Classes of property are exempt by statute from the Second Homes Premium as detailed below:

• A dwelling which is or would be someone's sole or main residence if they were not residing in job related armed forces accommodation. (Class E)
• Annexes forming part of, or being treated as part of, the main dwelling. (Class F)
• Dwellings being actively marketed for sale (12 months limit). (Class G)
• Dwellings being actively marketed for let (12 months limit). (Class H)
• Unoccupied dwellings which fell within exempt Class F and where probate has recently been granted (12 months from grant of probate/letters of administration. (Class I)
• Job-related dwellings. (Class J)
• Occupied caravan pitches and boat moorings. (Class K)
• Seasonal homes where year-round, permanent occupation is prohibited, specified for use as holiday accommodation or planning condition preventing occupancy for more than 28 days continuously. (Class L).

4.3.6 - Local Exceptions - originally introduced from 1 April 2017 (see Paragraph 5.4 - Local Exceptions), authority is delegated to the Head of Shared Service to use discretion, based upon on the individual merits of each case, not to charge the additional Premium. (please view - Appendix A for details)

4.3.7 - In deciding whether to use discretion, consideration should be given to legislation and government guidance together with relevant case law arising from the legislation, in particular K v Wolverhampton City Council, F v Wychavon District Council, J v. South Staffordshire Council.

4.3.8 - All requests for discretion should be made in writing, enclosing documentary evidence, addressed to:

Revenues Services, PO Box 30, Town Hall, Preston, PR1 2GD.

Email direct to: CTax@preston.gov.uk.

4.4 - Second Homes

4.4.1 - Defined as a dwelling, which is no one's sole or main residence but which is furnished.

4.4.2 - The charge applies to all cases except where the legislation determines otherwise and in those cases (as follows) a charge of 50% may apply (rather than the 100%):

• Dwellings which are furnished but unoccupied because the owner is liable to a Council Tax elsewhere in job-related accommodation;
• Empty but furnished dwellings of service personnel resident in accommodation provided by the Ministry of Defence;
• If the dwelling is a caravan or houseboat; or
• Where members of the clergy are required to live in accommodation provided by their employer to perform the duties of their office.

From 1 April 2025 a premium charge of 100% will be applied to second homes, except those where the legislation determines otherwise.