Council Tax - Second Homes
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http://www.odpm.gov.uk/news/0211/0123.htm
Communities across the country will benefit from new powers which will enable councils to fund improvements in local services, such as more affordable housing and better schools, by restricting council tax discounts for second homes.
The changes, announced on 19 November 2002 by the Office of the Deputy Prime Minister (ODPM), could raise an estimated extra £65 million nationally for councils to invest directly in local services. The Government proposes to give councils in England the choice to apply council tax discounts of between 10 per cent and 50 per cent for second homes. Currently second homeowners have an automatic entitlement to a 50 per cent discount.
Councils will also be able to end discounts for long term empty property completely. Councils in the areas where the second homes discount has been reduced will retain any additional council tax raised and will be able to decide how to spend this money to improve local public services, such as affordable housing, transport or policing. This will help authorities in areas with large numbers of second homes to address additional pressures on the supply of affordable housing. The move fulfils a commitment made in the local government White Paper - Strong Local Leadership - Quality Public Services - to devolve more decisions on council tax discounts and exemptions.
Local Government Minister, Nick Raynsford commented: "We are aware of the problems in both rural and urban areas, where there are many second homes and properties that are left empty for a long time. "In many areas, second homeowners can contribute strongly to communities. However, whether homeowners occupy a property only at weekends or for a few weeks in the summer or all year round, they still place a demand on local services, such as highways maintenance, street cleaning, refuse collection, fire and police. They also benefit from schemes for making our towns and villages cleaner and safer. We believe it is only right that second homeowners pay a fair contribution to these costs. Indeed the fact that second homeowners currently enjoy a 50 per cent discount is a cause of resentment in several areas. "High demand for second homes may affect property prices, forcing local people to look for housing elsewhere. We are especially concerned about the impact this trend may have for local people on low incomes and key workers who are vital to the long-term sustainability of our communities.
Councils in such areas have argued for the ability to charge full council tax on second homes and the proceeds to fund new affordable housing for local people in need. "To help councils tackle these problems we have decided to give councils the discretion to vary the council tax discounts for second homes. We also believe that councils should be able to limit council tax discounts on long-term empty properties which can blight neighbourhoods. This will provide a further incentive to get such properties brought back into use, in accordance with our commitment to reduce central government impositions on local authorities and to extend local discretion. "We believe that councils are best placed to make decisions on local taxation in the interests of the communities they are elected to serve."
The legislation will recognise the special position of those who live in tied accommodation, such as pub landlords and clergy. In addition, councils in England and Wales will be given powers to create their own discounts and exemptions. These additional powers could be used to address local hardships, such as flooding and other natural disasters. Discounts could also be applied in individual cases, such as to ease the council tax burden on a disabled person. Councils exercising these powers will meet the costs of any new discounts or exemptions.
The Government will include the necessary provisions in its Local Government Bill which received Royal Assent in December 2002.
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