Report by Director of Resources (attached).

Councillor Prowse re-declared his Non Registerable Interest and left the room during the consideration of this item.

The Committee considered a report by the Director of Resources (circulated previously) regarding Council Tax Discounts and Premiums.

The Director of Resources highlighted the following:

·       This report regarding Council tax discounts and premiums was presented on an annual basis.

·       Page 26 set out the current levels of discounts and premiums.

·       The changes were provided by the Levelling Up and Regeneration Bill (Bill 169 2022-23), which was currently making its way through the legislation process.

·       The changes within the Bill essentially fell into two distinct parts namely:

(a)  To bring forward the period from two years to one year when an unoccupied and substantially unfurnished dwelling (empty dwelling) could be charged a premium of 100%. All other empty dwelling premiums remain unchanged, namely:

Ø   A premium of 200% where a dwelling has remained empty for a period of 5 years or more;

Ø  A premium of 300% where a dwelling has remained empty for a period of 10 years or more; and

(b)  To enable the charging of a 100% premium for any dwellings which were:

Ø  No one’s sole or main residence; and

Ø  Substantially furnished.

·       Premiums were also introduced by Government in 2013 with a view to encouraging homeowners to occupy homes and not leave them vacant in the long term. Initially premiums could only be charged at 50% but legislation has now changed to allow a progressive charge to be made as follows:

Ø  Dwellings left unoccupied and substantially unfurnished for 2 years or more, up to 100%;

Ø  Dwellings left unoccupied and substantially unfurnished for 5 years or more, up to 200%; and

Ø  Dwellings left unoccupied and substantially unfurnished for 10 years or more, up to 300%.

·       Government, together with local authorities, had unfortunately seen a rise of in the number empty dwellings together with a growth in second homes. Inconsistencies in the legislation had also been identified whereby a premium could be avoided by the taxpayer merely furnishing an empty premises, when it would become a ‘second home’ which currently had a maximum charge of 100%.

·       Clauses within the Levelling Up and Regeneration Bill (Bill 169 2022-23) have been introduced in order to address the inconsistencies and also to bring more dwellings into use.

·       Changes to empty dwelling premiums:

Ø  Clause 72 (1) (b) of the Bill will permit billing authorities in England to impose an empty dwellings premium after one year instead of two. This gave effect to a commitment made by Government in the Levelling Up White Paper.

Ø  Clause 72 (1) (a) provides that billing authorities must have regard to any guidance issued by the Secretary of State when deciding whether to implement an empty dwellings premium and it is expected that the current guidance drafted by Government in 2013 will be updated. This change will come into effect from the 2024/25 financial year.

Ø  In addition, Clause 72 (2) of the Bill provides that from 1 April 2024, a property can be charged an empty dwellings premium at 100% after one year, even if it became empty before 1 April 2024.

·       Introduction of premiums for second homes:

Ø  At present, English billing authorities may only impose an empty dwellings premium on properties that are ‘unoccupied and substantially unfurnished’. This term is defined via case law, not in legislation. However, it does not cover dwellings that are no one’s sole or main residence but are furnished. An empty dwellings premium could therefore not be imposed on properties that are maintained as second homes for regular use by their owners.

Ø  Clause 73 of the Bill will insert a new section 11C into the Local Government Finance Act 1992. This will permit billing authorities to apply a premium to properties that have no resident and are “substantially furnished”. The maximum Council Tax charge in these cases would be a standard 100% charge plus, if the recommendations are accepted by Council, a premium of 100% making a total Council Tax charge of 200%.

·       Based on the Council Tax Base (October 2022 CTB1) the authority had the following number of dwellings which were subject to an empty dwelling premium:

Ø  100% premium, Band A 33, Band B 13, Band C 12, Band D 8, Band E 5, Band F 3, Band G 2 and Band H 1.  A total of 77 properties.

Ø  200% premium, Band A 10, Band B 5, Band C 1, Band D 3, Bands E, F, G and H 0.  A total of 19 properties.

Ø  300% premium, Band A 5, Band B 3, Band C 2, Band D 3, Band E 1, Band F 0, Band G 1 and Band H 0.  A total of 15 properties.

·       Based on the Council Tax Base (October 2022 CTB1) the authority had the following unoccupied but substantially furnished properties which could be subject to a 100% premium, subject to the Bill receiving Royal Assent and Government guidance:

Ø  Band A 405, Band B 330, Band C 377, Band D 327, Band E 187, Band F 121, Band G 57 and Band H 5.  A total of 1809 properties.

·       The increased potential £4.2million additional income from the proposed changes would only be available at the earliest from the 2024/25 financial year and subsequent years and would be shared between the Council, the major precepting authorities and the local precepting authorities in line with their share of the Council Tax.  The share for North Devon Council was around 10% (circa £420,000).

Councillors Lane and Lofthouse re-declared their non-registerable interests and left the room prior to debate and the vote taking place.

In response to questions the Director of Resources and Deputy Chief Executive gave the following replies:

·       A future report would come to members detailing progress following the  project work around empty properties.

·       Members would decide on how any additional revenue was incorporated into the budget as part of the normal annual budget setting framework.

RECOMMENDED that the following be approved at Council:

(a)    That for the 2023/24 financial year, the existing discretionary discounts and premiums remain as at present;

(b)   That for 2024/25 financial year, the discount level for Class C and D remain as at present;

(c)    That, subject to the Levelling Up and Regeneration Bill becoming law, from 1 April 2024 the current premium of 100% for all dwellings which are unoccupied and substantially unfurnished (empty dwellings) be applied after a period of one year (all other premiums remain as at present); and

(d)   That, subject to the Levelling Up and Regeneration Bill becoming law, from 1 April 2024 a premium of 100% apply for all dwellings which are unoccupied but substantially furnished.