Executive Board

 

18 november 2019 

 

COUNCIL TAX DISCOUNT FOR LONG TERM VOIDS

 

Purpose:   

This report recommends amending the authority’s discretionary powers in order to remove the discount awarded in respect of long term empty properties and charge the full Council tax liability with effect from 2020/21.

 

RECOMMENDATIONS / KEY DECISIONS REQUIRED:

 It is recommended that the council adopts the recommendation for the removal of the 50% discount on long term empty properties and the full council tax charge apply to class C properties from 1st April 2020.

 

REASONS:

 

Welsh Government  are proposing to change the Revenue Support Grant (RSG) allocation so to maintain the 50% discount in Council Tax on long term empty properties will likely impact on level of RSG.

 

Relevant scrutiny committee to be consulted: N/A                                          

Exec Board Decision Required:     YES

Council Decision Required:            NO

 

EXECUTIVE BOARD MEMBER PORTFOLIO HOLDER:
Councillor David Jenkins (Resources)

Directorate: Corporate Services

 

Executive Board Member:

Cllr David Jenkins

 

Name of Head of Service:

Helen Pugh

 

Report Author:

Ann Thomas

Designations:

 

 

 

 

Head of Revenue and Financial Compliance

 

Revenue Services Manager

Tel Nos. / E Mail Addresses:

 

 

 

HLPugh@Carmarthenshire.gov.uk

01267 246223

 

AnThomas@Carmarhenshire.gov.uk

01554 742126

 


EXECUTIVE SUMMARY

 

 

Executive Board

18 november 2019 

 

 

 

 COUNCIL TAX DISCOUNT FOR LONG TERM VOIDS

 

Empty properties are classed as properties that are unoccupied and substantially unfurnished,

 

Current Situation:

 

a.    Under the “standard” Council Tax scheme, when a dwelling becomes unoccupied and stands substantially unfurnished, there is an initial 6 months exemption period during which time there is no charge.

 

b.    Once this exemption period expires (and provided no other exemption applies) a vacant property is subject to a 50% charge, or put another way, it attracts the standard 50% discount, which will carry on indefinitely.

 

c.    At any given time there are in the region of 3000 dwellings in Carmarthenshire that are vacant and subject to the 50% charge. (See Table 1 for overview of the volume of vacant dwellings)

 

d.    The Local Government Act 2003 gave councils the discretionary powers to reduce or remove the 50% discount in respect of long term empty properties.

 

e.    The annual Tax Base calculation has reflected the reduction in taxable resource due to the standard discounts granted. This means that the authority has been effectively “compensated” for the loss via RSG; i.e. for vacant properties, 50% is collected from owners and 50% received via RSG

 

f.     The Welsh Government are seeking to introduce changes to the Local Government Funding formula for 2020/21, so local authorities will be financially disadvantaged if they continue to award the discount.

 

g.    Since 2004, across Wales, a number of councils have used their discretionary powers to remove the discount on C properties. There are only 3 other councils that apply a 50% discount on Class C properties, namely Swansea, Neath and Port Talbot and Blaenau Gwent. It is expected that all Councils will review their policies to provide discounts under these classes from 1 April 2020.

 

DETAILED REPORT ATTACHED?

Yes


IMPLICATIONS

 

 

I confirm that other than those implications which have been agreed with the appropriate Directors / Heads of Service and are referred to in detail below, there are no other implications associated with this report :

 

Signed:          C Moore           Director of Corporate Services                                         

 

Policy, Crime & Disorder and Equalities

 

Legal

Finance

ICT

Risk Management Issues

Staffing Implications

Physical Assets 

YES

NONE

 

YES

NONE

 

NONE

 

NONE

NONE

Policy, Crime & Disorder and Equalities

·         The policy is being introduced in response to a notification that Welsh Government are proposing to change the Revenue Support Grant (RSG) allocation so to maintain the 50% discount in Council Tax on long term empty properties will likely impact on level of RSG.

 

·         The recommendation is for the discount to be removed from 1.4.20

 

·         An equalities impact assessment has been undertaken.

·         Empty properties can be detrimental to other properties in the area in terms of both market value and quality of life, and can encourage anti-social behaviour such as vandalism, squatting, littering and crime.

·         The removal of the discount will encourage tax payers to bring these properties back into use and have a positive impact in assisting to reduce crime and disorder.

 


Legal 

There are no legal impacts arising from this report.

 


Finance 

·         The formula to allocate Local Authority funding is kept under regular review by Distribution Sub Group, a working group constituting local government Section 151 officers, WLGA officers and Welsh Government officials. In September 2019, a recommendation was approved to disregard vacant property discounts for the purposes of the tax base. This will have the effect of reducing Carmarthenshire’s share of Revenue Support Grant by approximately £1 million.

 

·         This reduction can be offset by an increase in council tax receipts by removal of the current discretionary discount for dwellings vacant in excess of six months. Officers will monitor this additional revenue closely with the aim of ensuring no reduction in Carmarthenshire’s collection rate. 

 

CONSULTATIONS

 

 

I confirm that the appropriate consultations have taken in place and the outcomes are as detailed below

 

Signed:       C Moore           Director of Corporate Services                                         

 

1.    Scrutiny Committee  - n/a

 

2.    2.Local Member(s)  -  n/a

 

3.    3.Community / Town Council  - n/a

 

4.    4.Relevant Partners 

 

5.    5.Staff Side Representatives and other Organisations

 

6.    No consultation exercise has been undertaken in respect of this proposal.

 

Section 100D Local Government Act, 1972 – Access to Information

List of Background Papers used in the preparation of this report:

 

THESE ARE DETAILED BELOW    

 

Title of Document

 

File Ref No.

Locations that the papers are available for public inspection

Various related documents

 

Council File Plan:

Finance/Local Taxation/Council Tax