The Courier & Advertiser (Fife Edition)
Vacant house owners face unwelcome cost
SOME FARMERS and landowners may recently have received an unwelcome notice doubling the council tax payable on empty houses.
Many councils implemented changes from April 1 2014 which allows them to charge double the normal council tax for a property if it has been empty for 12 months or more.
The purpose is to try to help tackle the shortage of property around the country, although whether this will have the desired effect remains to be seen.
Many will view it as a convenient excuse for raising more money from longsuffering taxpayers.
There are often very good reasons why a house has been left empty and simply doubling the council tax is unlikely to persuade the owner to let or sell property when they did not wish to do so prior the increase in charge.
There are a variety of exemptions which, depending on the circumstances, it may be possible to claim.
Usually there is no council tax to pay on an empty and unfurnished property for six months from the date it was last occupied and a 50% discount applies for the next six months and only after the property has been empty for a year will the council tax be doubled.
If the property is empty but furnished some councils give a discount of 10% for a year from the date it was last occupied when, for example, the owner looks for a new tenant.
Discounts may also apply if the occupier is in hospital, care home, if a new owner of a property is renovating it and major repair work has to be undertaken to make it habitable, if it is against the law to occupy the property, if the property was last occupied by a farm worker and is situated on agricultural land, if it is tied accommodation or a more drastic situation which most people will want to avoid is if the occupier is in prison.
Discounts may also apply if there is only one person living in the property as council tax is usually levied on the basis that there are two or more adults aged over 18 years living in the property as their main home.
Some people may be disregarded in determining the number of residents, for example students or carers and reductions also apply to those on low income.
This may provide parents an opportunity to persuade children who have been cluttering up the house for too long to move into the empty cottage to fend for themselves.
Not only does this bring parents long-awaited peace and quiet but also means they may save money by avoiding the doubling of council tax and the child may qualify for a single person occupancy discount.
There is also sometimes a grey area in establishing whether a property is derelict and completely uninhabitable and therefore not liable to council tax or if the property is just in poor condition and awaiting renovation.
With quite substantial amounts of money involved it is well worth doing some research and making the facts and circumstances relating to each particular property known to the council.
Council tax is obviously a property based tax and difficult to avoid as you can’t hide a house in a Swiss Bank account.
Tax on property therefore has its attractions as a means of raising income for local as well as national governments.
“Many will view it as a convenient excuse for raising more money from long-suffering
taxpayers.”
There is already in effect a “mansion tax” for houses worth over £2 million which are owned by a company.
The Budget in March will extend that tax over the next couple of years to houses worth £500,000 or more.
It would be easy to extend that tax further or even introduce an annual wealth tax to all property including land whether owned by a company or not.
An annual wealth tax on property is well established in many other countries and could easily be introduced here, if it is the present doubling of Council Tax bills may seem cheap.