Agenda item

Determination of the council tax premium payable in respect of properties occupied periodically

Report of the Director of Environment and Resident Experience. To be introduced by the Cabinet Member for Finance and Local Investment.


Determining the additional Council Tax payable on second homes in accordance with the Levelling-up and Regeneration Act 2023. This decision will further progress to Full Council for adoption.


The Cabinet Member for Finance and Local Investment introduced the report which set out a proposed increase in Council Tax charge for dwellings which are substantially furnished and have no resident (which are colloquially known as “second homes”). It was proposed that a 100% premium should apply in such circumstances.


In response to questions from Cllr Hakata and Cllr da Costa, the following information was provided:


-       In relation to the threshold for assessing if a second home, this did not have to be a year and could be a lower period where there were reasons to understand that the properties were being let or the properties were left open for periods of time without anybody living in them. This proposal only came into effect in the next year and would provide some time to acquire the required market information in the course of this year.


-       For properties that were between lets and whether these would be liable for the 100% extra just for the period they were vacant, this policy would not affect a property where there was nobody living there. Also, if it was not furnished it would be dealt with in the empty dwellings policy also on the agenda.


-       The Director for Finance clarified that the Council were expecting £900k income and that additional income was not hypothecated.





To recommends to Full Council that it determines that –


1.          For any dwelling within the area of the Council if, on any day, there is no

resident of that dwelling and it is substantially furnished, the following shall



i. the discount in s11(2)(a) of the Local Government and Finance Act 1992

(LGFA) shall not apply to that dwelling; and

ii. the amount of council tax payable in respect of that dwelling and that day

shall be increased by 100 percent.


Reasons for decision


Council Tax legislation changed allowing councils to charge a premium of up to 100% on dwellings where there is no resident, and it is substantially furnished.


Applying the 100% premium has the potential to bring additional income which would help lessen the councils funding pressures in 2025.


An increased premium may encourage those using properties in the borough as second homes to relinquish them thus becoming available to those who live in the borough on a permanent basis.


 Due consideration has been given to circumstances where the reason a

dwelling is empty and furnished is because it is between lets. However, the

new legislation does not provide for any interim period (e.g., a two-week grace

period) before the premium is applied and instead, it applies with immediate effect. Charging the premium in this type of scenario would likely incentivise the properties to be brought back into use as soon as practicable.


The Council will continue to have the means to reduce or remove Council Tax liability under section 13A (1)(c) of the Local Government Finance Act 1992 (e.g., cases where there is exceptional hardship).


Alternative options considered


Not applying the premium or applying it a lesser percentage


The Council could choose not to apply the premium, or to apply the premium at an amount less than 100%.


This is not proposed because the Council is under significant financial

pressure to deliver a sustainable Medium Term Financial Strategy. Applying

the Council Tax premium at 100% would likely generate additional income for

the Council.


In addition, increasing the premium to the maximum 100% may encourage residents to bring such properties (whether used as a second home or otherwise) back into permanent residential use which could in turn lead to an increase in available housing.


Supporting documents: