Sunday, 16 June 2013

East Devon: taxing second homes

The District Council will be charging second-home owners full Council Tax as of this April:

Changes to Council Tax discounts & exemptions

The Government announced changes to Council Tax discounts and exemptions in respect of second homes and certain empty properties.  This will allow councils greater flexibility over certain discounts and exemptions that may apply to empty properties. There will also be a new power to charge an additional amount of Council Tax on properties that have been continuously empty for more than two years. The changes will started on 1st April 2013.
The Government has
  • Abolished the current exemption class C (unoccupied and unfurnished) and are allowing councils to set their own levels of discount
  • Abolished the current exemption class A (uninhabitable) and are allowing    councils to set their own levels of discount.
  • Allowed councils to levy an ‘empty homes premium’ on properties that have    been empty over 2 years
  • Allowed the full Council Tax to be charged on second homes
What the Council has decided
East Devon District Council agreed the following changes at full council on 5th December 2012:
  • Unoccupied and unfurnished property – the current 100% exemption for up to 6 months has been abolished. Instead we will give a discount of 100% for up to 3 months.
  • Uninhabitable property – the current 100% exemption for up to 12 months has been abolished. Instead we will give a discount of 50% for up to 12 months.
  • Long Term empty property – currently we charge 100% after 6 months. Instead the 100% will now be charged after 3 months & we will also add a 50% premium to those that have been continuously empty for 2 years.
  • Second homes – currently a 10% discount can be given.  From 1st April 2013 no discount will be given and these will be charged at 100%.
What we cannot change
We are sometimes asked why we do not charge Council Tax to certain people, or why we do not give exemptions to other people. The answer is that most of the Council Tax rules are set by government legislation and we do not have the power to change them.
Here are a few examples of things that we have no discretion to change:
  • decisions about whether a property is liable or not for Council Tax and the band that it is in (it is the government's Valuation Office Agency that decides this)
  • the rules around who is liable to pay Council Tax
  • the amount of the Sole Occupier Discount (25%) or criteria for claiming it
  • the rules around other properties being exempt from Council Tax e.g., where the owner has died or in a nursing home
  • the rules around other properties being allowed a discount from Council Tax e.g., where certain occupants are students, carers or severely mentally impaired
Changes to Council Tax Benefit
The Government abolished the current national Council Tax Benefit scheme and has asked councils to run local schemes from April 2013. Our scheme is called Council tax support. The Government has said that it will not fully fund the new scheme which means in East Devon, overall reduction in funding of 10% or about £1 million.
The Government has stated there will be no reduction in the amount of help pensioners currently receive.  For more information see the Council Tax Support page.
Page last updated on 23 May 2013
East Devon District Council - Technical Reforms Council Tax
East Devon District Council - Second or Holiday Home Discount

This follows on from changes from central government and debate here in Devon:
Futures Forum: Devon: taxing second homes

Including an interesting Freedom of Information request:
Second Homes - a Freedom of Information request to East Devon District Council - WhatDoTheyKnow

'Double council tax' call on Devon's second homes

8 July 2011 

Julian Brazil, who is leader of the Liberal Democrat Group for South Hams District Council, said they "should pay for the privilege".
He has suggested the motion which will be discussed at a meeting at the authority on Thursday.
Second home owners in the area currently receive a 10% council tax discount on their second property.
Mr Brazil said: "We're running out of money, we're having to cut services and this would be a way of raising funds.
In the South Hams district, BBC Research conducted earlier in July showed there were 4,115 second homes.
Mr Brazil said his proposal could make an estimated £8m a year.
'Lucky enough'

"If people are fortunate enough to have a second home they should pay for that privilege."
Devon has a total of 14,137 second homes, according to the BBC research.
Mr Brazil said: "The proposal is not against second home owners - the council tax is incredibly unfair.
"People who are lucky enough to own two homes should pay a little bit more."
Mr Brazil is putting the proposal to the Conservative-run council on Thursday.
He said if the proposal was agreed at a local level, Westminster would have to agree it before it could come into force.

EDDC councillors to scrap council tax breaks on 2nd homes?

22 December 2012

It appears that the all-conservative EDDC cabinet is poised to vote to remove council tax discount on second homes.
According to the January cabinet agenda papers that were published yesterday, hidden away in the revenue and budgets report, is a section on how much EDDC would claw back from second home owners by charging the full 100 per cent council tax charge, as opposed to the current 90 per cent.
Cabinet members are being asked to back the revised position, which apparently is based on new government guidance, set to be in place from April 2013.
Just over a year ago (at the October 2011 full council meeting) I lodged a motion asking EDDC councillors to call on the government to scrap this discount.  The motion was swiftly intercepted by leader, Cllr Paul Diviani before a debate could start and instead was referred to the cabinet…... where it was killed stony dead.
At that time, the EDDC income from scrapping the discount was calculated to be around £29,000.  Now, officers say, the likely income would be £48,000, including other council tax changes, which could also take effect.
I am assuming that this time cabinet members will seize on the initiative as being a wonderful one and will support it wholeheartedly ....after all, an independent councillor has had no part in this report or recommendation!
On a serious note, it is a very good step forward indeed, if ridiculously long overdue.  I would actually favour increasing council tax further for second home owners. 
Homes that are empty for much of the year can have a negative impact on the economies of towns, as local shops and pubs do not get the custom they need to survive.  Some communities - particularly in Cornwall and the South Hams, have withered because of the large number of homes standing empty for much of the time. 
The problem of second home ownership is a huge one and it is increasing at a frightening rate.  We must do all we can to put the brakes on and protect our communities from dying on their feet.
Below are links to the blog-posts of what happened at a full council meeting and subsequent cabinet meeting in November last year, following Cllr Diviani’s speedy intervention to avoid it being debated as a motion.
The cabinet debate will take place on Wednesday 9 January 2013, in the council chamber, Knowle, Sidmouth.  The meeting starts at 5.30pm.
See page 37 of the January cabinet papers here for more information on the initiative: http://www.eastdevon.gov.uk/combined_090113_-_public_version.pdf


1. At 05:01 pm on 08th Jan Elena Stone wrote:
Scrapping 10% discount is unfair to second homeowners like us which are not well-off at all. We kept my husband’s childhood home bought by my parents in-law in 1951 as our future retirement home.  It is always a struggle to keep the house both financially, time and effort to maintain the house. However, we occasionally seek assistance from local tradesmen.
We have little use of EDDC’s services for the amount of time we spent there. Not all second home owners are wealthy. Please re-instate the 10% discount, it used to be 50% discount.
Claire Wright - Your Independent East Devon District Councillor for Ottery Rural

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