PAPER C
Committee: RESOURCES
SELECT COMMITTEE
Date: 21
AUGUST 2002
Title: COUNCIL
TAX ON SECOND HOMES
REPORT OF THE STRATEGIC DIRECTOR OF FINANCE AND INFORMATION AND COUNTY
TREASURER
SUMMARY
To advise members of the current
arrangements that apply to council tax on second homes and empty dwellings and
the suggestions for change recently published by the Government.
BACKGROUND
The current council tax legislation
allows a reduced charge for dwellings that are not used as anyone’s main home.
There are two specific categories:
1)
Exempt dwellings - there are currently 23 classes of
exempt dwellings which do not have a council tax liability for a specified
period of time.
Included
in this category are properties occupied by students, those left empty because
of a need to move in order to receive or provide care and properties which are
vacant and a grant of probate is awaited.
There is
also a six-month exemption for dwellings which become vacant and a twelve month
exemption for dwellings requiring major repairs or undergoing structural
alterations. For both of these categories the property must be empty and
unfurnished.
2) Second Homes - this category comprises
dwellings which are not used as anyone’s sole or main residence and attract a
50% discount on the council tax liability.
The council tax banding list contains 62,303
properties of which 1,344 (1,165 Band D equivalents) are classed as exempt and
4,216 (4,055 Band D equivalents) receive the 50% discount.
FINANCIAL IMPLICATIONS
Based on the current years average council tax
chargeable at Band D (excluding Parish charges) of £970.92 the reduction in
income from exempt dwellings and second homes is:
Exempt dwellings £1,131,122
Second Homes £1,968,540
However, the present grant arrangements take into
account the reduction in income due to exemptions and discounts, so the cost is
wholly borne at national level.