No. | Item | ||||||
---|---|---|---|---|---|---|---|
Question from: County Councillor Jake Berriman Subject: New occupants of problem void properties penalised through Council Tax Premium
Question:
Earlier this week I was approached by a disgruntled constituent who, on the 4th of February 2022, completed the purchase of a one bedroom property in my Ward. She is yet to move into the property, which has been void for more than 12 months, as it requires a new central heating system, bathroom and other necessary works to make it habitable once again.
The person concerned is returning to Powys (from over the border in Kington), bringing her business with her, whilst purchasing her first home. By completing the Council Tax form honestly to advise that she would be doing work to the property, to bring it up to a habitable standard, prior to moving into her new home, she was rewarded with a penalty premium of £104.20 being added to her council tax bill. All for simply disclosing that the property is empty and that work underway to sort out previous neglect.
Correspondence with relevant officers has confirmed that the premium, amounting to 150% council tax has applied in Powys since April 2017 arising from provisions set out in the Housing (Wales) Act 2014 and Local Government Finance Act 1992 (as amended). It also confirmed that the premium applies to the property and not the owner. And this, it seems, is immoveable, not allowing a new owner any period of grace.
Earlier this month Cabinet approved the Empty Property Action Plan, developed in collaboration with the Welsh Government, as part of a series of ongoing measures to support the early reuse and occupation of problem void properties, such as this example in my ward. These measures, have over time, included interest free loans and even grants, but the only help that this new owner, on a limited budget, received was a bill for an extra 50% Council Tax arising from that fact that the previous owner had neglected it for more than 12 months.
Given the inherent unfairness of our current system, what action, if any, does the Cabinet Member propose to ensure that relevant officers have sufficient discretion to actively encourage (rather than discourage) prospective purchasers willing to invest in Powys’ 1000 void properties, rightly deemed a priority to the Council?
Minutes: Response by the Portfolio Holder:
The discretion to apply a premium is afforded to Local authorities to consider what amount they wish to set a premium for the three prescribed classes of dwelling defined in the LGFA 1992*. Those three classes prescribed in law are: Classes A and B are properties which are furnished (second homes/periodically occupied homes, holiday homes) which full council considered 50% premium from 2017, but 75% premium from 1st April 2023
Class C is prescribed as every dwelling that is a) Unoccupied b) Substantially unfurnished Full council has considered and approved to continue with a 50% premium on going
In property circumstances such as this, officers would consider if an exemption for council tax can apply first, dependant on the circumstances for each individual case. If the relevant criteria for exemption is not met, the premium is applied on the basis that the property is unoccupied and unfurnished and has been for 12 months or more. Most exemptions are time linked and so the majority of exemption classes we consider are uninhabitable (maximum 12 months) and left unoccupied and unfurnished (maximum 6 months). There is no discretion within law available to extend these prescribed periods.
*However, Section13a LGFA 1992 permits billing authorities to resolve the amount a person is liable to pay by way of council tax to such an extent it thinks fit. This includes the power to reduce an amount to nil, and maybe exercised in relation to particular cases or by determining a class of case in which liability is to be reduced to an extent provided for by the determination. Under normal circumstances, the cost of any such reduction is borne by the local authority.
PCC policy (link below) has identified three classes of property where a reduction can be applied and they are a) Fire Damaged b) Property Flooded c) Unsafe property such as gas or oil leak, storm damage, subsidence.
Council Tax: Locally Defined Discounts (Section 13A) Framework - Powys County Council
Under this policy we also consider individual cases where the payment of the Council Tax causes hardship. These cases are individually considered by the portfolio holder for finance.
To conclude, most exemptions are based on the facts and evidence provided to consider if the exemption criteria is met. There is no time discretion in law and so in all of these cases, after a 12 month period of it being unoccupied and substantially furnished, a premium will apply.
|