Higher rates of council tax for owners of second homes and long-term empty properties in Merthyr Tydfil

By Anthony Lewis

Higher rates of council tax will be charged for long term empty properties and second homes in Merthyr Tydfil.

After a consultation, full council on Wednesday, March 8, agreed to charge a 100% council tax premium on long-term empty properties, that have been empty for more than 12 months, with effect from April 1, 2023.

They also approved introducing a 100% premium on second homes which the report called “periodically occupied properties” from April 1, 2024.

Taking into account the money required for that post and the expected £415,000 impact from the long term empty property premium, and £321,000 impact from the second homes premium, the extra income for year one would be over £375,000, rising to over £696,000 in year two when the second homes premium would come in, and then £695,000 in year three.

Council also approved the creation of a new recovery inspector/premium officer post with the cost being £40,000 in year one, £41,000 in year two and £42,000 in year three.

Since April, 2017, councils in Wales have had powers to charge a premium of up to 100% on top of the standard rate of council tax on long-term empty properties and second homes.

From April, 2023, councils will have powers to set premium levels up to 300% for the 2023/2024 financial year and following years.

Merthyr Tydfil Council previously decided from April, 2019, to apply a council tax discount of 0% and the report said that the council had consistently decided that no discount be applied to second homes.

Latest figures from February 24 this year show that there were 943 empty and
unfurnished properties of which 467 had been empty for more than six months.

There are 272 properties that are “occupied periodically” or second homes within Merthyr Tydfil.

A long-term unoccupied property is defined as an unoccupied, substantially
unfurnished property that is not exempt.

Unoccupied properties are generally exempt for the initial six-month period, (or twelve months for those properties that are in need of or are undergoing renovation.

A second home is defined as a property which is not a person’s sole or main home and is substantially furnished. These dwellings are referred to in the 1992 Act as dwellings occupied periodically but they are commonly referred to as “second homes” the report said.

In order for a premium to apply to second homes, an authority must make its first decision at least one year before the beginning of the financial year to which the premium relates.

The report said that the discretion given to councils to charge a premium was intended to be used as part of a wider strategy to help with bringing long term empty properties back into use to provide safe, secure and affordable homes for residents, adding that councils should also take into account the particular housing need and circumstances within the area in the Housing Support Programme Strategy.

The report said the strategy built upon existing efforts and progress being made and the council was looking toward developing homes and solutions to meet the current and future demand and prevent future homelessness.

The report said that Welsh Government had not ring fenced how councils should use any additional funding generated by a premium but that it had
encouraged them to use any additional revenue generated to help meet local housing needs in line with the policy intentions of the premiums.

Although the new legislation allows for a maximum 300% council tax premium, no council within Wales is currently at this level.

The report said: “We are well aware of the impact that Long-term Empty Properties and Second Homes have within our communities and the decision to charge a premium on these properties to encourage owners to bring them back into use is a correct one.

“However, the level that a Council Tax Premium is set to, has to be balanced against the adverse impact on the local authority’s collection rate and it is to this end that no local authority within Wales is imposing the maximum premium charge.”

The report said that collection rates on empty and second homes were currently around 80% for in year collection, and the expected collection on the introduction of a council tax premium was expected to be around 70% in year.

There are a number of exemptions including properties being marketed for sale (time-limited for one year), properties being marketed for let – time-limited for one year), annexes forming part of, or being treated as part
of, the main dwelling and properties which would be someone’s sole or
main residence if they were not living in armed forces accommodation.

Exemptions that only apply to second homes include occupied caravan pitches and boat moorings, seasonal homes where year-round occupation is
not allowed and job-related properties.

There were 462 responses to the consultation and 62.55% agreed that the council should introduce a council tax premium.

There was a joint preference in terms of how much the premium should be, with 26.55% agreeing that it should be charged at 50% and also 26.55% agreeing it should be charged at 300%.

Of those who responded, 62% agreed that the premium should be charged after one year.

There were 26 people (5.6%) who said they were landlords and 12 agreed that the council should charge a premium with 56 people (12%) saying that they were the owner of a long-term empty property and five agreed that the council should charge a premium.

The council report said it already looked to encourage owners to act positively in bringing properties into beneficial use in a number of ways such as signposting owners to the Houses into Homes loan scheme, matching potential developers with empty property owners, providing proof of empty status letters for VAT reduction on renovation costs and signposting owners to Leasing Scheme Wales.

Councillor Clive Jones said he welcomed the recommendations and said long term empty properties caused problems to their neighbours and they became derelict, damp and eyesores.

He said this was intended to be used as part of a wider strategy to provide safe, secure and affordable homes and that he hoped that they saw lots and lots of properties either sold, let to families that desperately needed them and that they wouldn’t be a blot on the landscape.

Councillor Jamie Scriven also welcomed it saying it was a genuine issue in the area and that they were in the middle of a housing crisis.

He said he hoped residents would be informed and supported to take up the £25,000 empty homes grant.

The deputy chief executive Alyn Owen said they’d registered an interest for the scheme and it would be subject to a council report in April. Councillor David Hughes said it had got to come to full council.

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