Council Tax on Long Term Empty Properties and the Housing Support Grant – Consultation on Proposals for Legislation: Shelter Scotland response

By: Shelter Scotland
Published: December 2011

Council Tax on Long Term Empty Properties and the Housing Support Grant – Consultation on Proposals for Legislation: Shelter Scotland response

Shelter Scotland supports councils having the power to levy a charge of up to double the standard council tax for a long term empty home (defined as empty longer than 6 months).
If the levy is designed to start to “kick-in” after a year of the property being empty then it would still ensure that the owner had an incentive to declare it as empty.

It is essential that the money raised is retained for investment in affordable housing, as this is what enhances the legitimacy of the levy. We think the legislation itself should enshrine that principle. However, we recognise that it may be necessary for council tax sections to earmark a small portion of that income to cover increased administrative and compliance costs.

We also believe that it is essential, for the attractiveness of the proposal, that councils commit at least a proportion of the income directly to bringing empty homes back into use; and that this be reflected in Scottish Government guidance.

In other words, the powers will have greatest impact if seen as part of a package – with incentives as well as sanctions – designed to increase re-use of empty homes, rather than simply being a measure to increase revenue.

Being in the position to offer support, including financial support, to owners who require it in order to make use of their property is much better than trying to create a series of exemptions from the levy. In general, we think the creation of classes of exemptions from the levy should be avoided and discretion over the levy exercised sparingly.

There is potentially a loophole to be exploited by applying the levy power to empty homes but not second homes. We believe that councils should have the power to levy the same charge on second homes, if they so choose.

There is merit in exploring further the way in which council tax liability could be used to sharpen incentives for developers who are sitting on developments of new property which have never been occupied and have been so for considerable lengths of time.

We have misgivings about the way in which the proposal is being reported publicly, as a potential source of up to £30 million a year. In practice, this is extremely unlikely to be realised, as it depends on the exercise of discretionary powers by 32 different councils. It also places the focus on the raising of revenue rather than the reduction in empty homes. In practice, there continues to be a need to look for other sources of funding for renovation of empty homes.

The Scottish Empty Homes Partnership, hosted by Shelter Scotland, will have a critical role to assist councils in implementation of the new regime from 2013-14 onwards; and that commitment to the continuation of the Partnership during that period would be very valuable.

We support the removal of Housing Support Grant as almost entirely a historical anomaly in the funding of council housing but request that there is a review of the way HRA income is spent.