In a previous article we wrote about how a local authority in London planned to increase the amount of council tax charged on empty homes. The aim was to encourage the landlords to find tenants rather than keeping the properties vacant. The recent UK Budget has taken this idea a step further, outlining new plans for the whole of the UK.
Currently a council can charge up to an additional 50% of council tax for vacant properties that have been unoccupied for two years or more. The change could give these local authorities the power to double this premium. As a result it would be even more costly for landlords to leave houses empty, hopefully encouraging them to find tenants instead. This could have a positive effect on housing supply at a time when demand continues to outstrip it.
It is not yet known how many local authorities in the UK will make use of the new powers when they are granted them. Some may choose to in order to reduce the number of empty homes whereas others will be more supportive of investors.
The change to council tax is the latest measure designed to cut the number of properties left intentionally vacant. In 2007 tax breaks for empty buildings were abolished. Last year a higher rate of stamp duty for second homes was introduced.
Investors who own properties that are currently vacant will need to keep an eye on this topic. If their local authority does make the move to charge an additional 100% of council tax they need to decide whether to pay the extra amount or look for tenants.
At Finefair we can assist investors in preparing for the change. We are a leading provider of estate management Kensington and Chelsea property owners and investors in other London Boroughs can rely on to help them. With our support they can consider their options and settle on the right course of action.
If you have any questions for us please feel free to get in touch.