Rental homes set to be subject to council tax as soon as they fall empty

New plans to give local authorities power to charge council tax on homes as soon as they become empty could hit sellers and landlords hard – and give letting agents a mammoth administrative headache.

At the moment, when a domestic property falls vacant, the owner is granted a mandatory period of six months before council tax becomes payable. Ministers want to abolish this mandatory requirement.

Under the Localism Act, the Government is proposing to replace it with a clause that would let local authorities charge whatever they wanted on empty homes for the first six months.

They could if they wished charge nothing, or the full 100% council tax, or anything in between. The carrot for local councils is undeniable – they would be able to hang on to every penny.

After the first six months, full council tax would be payable, as now.

The actual proposal is to abolish the Class C exemption for council tax purposes.

Class C dwellings are empty homes that are largely unfurnished. Other classes, which would appear to remain untouched by the latest moves, include homes left empty after someone has become ill or because the property is subject to probate.

Of the Class C category, the Government says ‘there is no compelling reason why the first six months should be treated so generously’.

The proposal could clearly hit landlords, as well as sellers needing to relocate quickly– for example, to new jobs or, in the case of older people, to be closer to family.

It comes at much the same time that a much higher-profile move has grabbed the headlines. The Local Government Finance Bill, currently going through Parliament, will allow local councils to charge higher amounts for homes empty for two years or more, as well as to double rates for second homes.

While that too could also affect sellers of some homes which fail to sell quickly, and private landlords with voids – a spokesman for the Local Government Association told LAT yesterday that the proposals could have ‘unintended consequences’ – it would be nothing like as complicated as the proposal to abolish Class C.

However, cash-strapped local authorities clearly like the idea of being able to charge whatever they like on newly-empty properties.

In the official consultation this spring, they overwhelming voted in favour (169 councils for, 25 councils against) to the Class C exemption being abolished. They were not only by far the most enthusiastic, but also the group which responded most to the proposal.

Only five property-related businesses responded (three against the proposal, two for it), and just 70 members of the public, thought to be landlords. Of these, i 11 were for the idea and 59 against it. Just one MP responded, favouring the abolition of the exemption.

However, even the most eager of local authorities would have to face up to the logistics of having to collect small amounts of council tax on properties vacant for only a few days.

Ian Sanford, of Pennington Homes, in Huntingdon, said: “With local authority finances under pressure in the present recession it is more than likely that authorities will choose not to grant council tax-free periods, which will have major financial implications for landlords and vendors alike.

“In addition, it will provide an additional administrative burden for letting agents in that they will have to advise local authorities of all vacant periods, most of which are often only of a duration of a few days. It is also likely that, in these cases, it will cost the local authority more to collect the small amounts than the additional revenue achieved.”


At Affirmed Choice Letting, the Chichester Letting Agent, we are passionate about the principles of personal customer care, and our guarantee is to provide a unique 'Peace Of Mind' property management service to tenants and landlords. Click here to find out how we help landlords to protect their investment.

Property firm kicked out and fined £10,000 by industry watchdog

West Yorkshire Lettings, a company operating out of Keighley in Yorkshire, has been hit with a £10,000 fine after being unable to meet a punishment dealt out to it by The Property Ombudsman.

The firm was initially fined £3,450 for a series of failures, with TPO saying they could find “no evidence” that repairs had been carried out on homes managed by WYL. The company also failed to inform a landlord of an offer received for a property, meaning that the landlord ended up with a tenant paying a reduced level of rent.

The failed repairs were serious in nature: In one of WYL's properties, their failure to fix a blocked toilet resulted in sewage seeping into a bath. In another, banisters were missing and mould was found growing. WYL's former director Mr Hameed Islam pleaded guilty to two charges against himself, and a further two on behalf of his company.

WYL then refused to pay this £3,450 fine, claiming they could not afford to. As a result, they have been expelled from TPO and fined £10,000. Gerry Fitzjohn, deputy chairman of the TPO board, said: “West Yorkshire Lettings had an obligation to pay the award, but refused to do so claiming that as a small business it could not afford it.

“The agency had also argued that repair work had been completed satisfactorily and had been ‘approved’ by a friend of the complainant. The Ombudsman could find no evidence to prove that was the case.

“We also noted that the agent had not provided proof that client money was being held in a separate account as required by the TPO Code of Practice. This presents potentially a very serious risk to those customers of that agent.

“As the agent had failed to pay the award and had breached other aspects of the TPO Code of Practice, the committee decided to expel it from membership.”

WYL have said that the employee responsible for these breaches has been expelled from the firm. However their attempts to appeal against the ruling were unsuccessful. A spokesperson for WYL now says that the firm is under different management, and that “We currently manage over 300 properties and all landlords are satisfied with our service.”

At Affirmed Choice Letting, the Chichester Letting Agent, we are passionate about the principles of personal customer care, and our guarantee is to provide a unique 'Peace Of Mind' property management service to tenants and landlords. Click here to find out how we help landlords to protect their investment.