In an attempt to boost housing supply and support tenants looking for homes, the government has announced new rules to reduce the number of long-term empty properties in the market.
The Department for Levelling Up, Housing and Communities has announced that, starting in April of this year, the council tax on long-term empty properties will double.
The rules, which will see a strengthened 100% council tax premium on empty homes, will apply when a property has been empty for twelve months, down from the current two years.
Furthermore, councils will not only be able to spend these premiums from the next financial year but will also be given new powers to introduce the tax premium on second homes in their area from 2025. The goal is to bring in millions more for public services and keep overall council tax bills down.
What are the exemptions?
There are a limited number of exemptions to these changes following a public consultation to ensure the changes are fair to homeowners. These include:
- Empty properties that are uninhabitable due to extensive renovation works
- Second homes that are not available for use year-round due to planning restrictions
- Homes that have been inherited to prevent grieving families from having to pay for up to a year
These changes come as part of the government's wider goal to boost housing supply and meet their own new homes target.
Simon Hoare, the Minister for Local Government, said on the changes: “Long-term empty properties are shutting local families and young people out of the housing market as they are being denied the opportunity to rent or buy in their own community.
“So, we are taking action as part of our long-term plan for housing. That means delivering more of the right homes in the right places and giving councils more powers to help give local people the homes they need.”
What these changes mean for landlords
It’s positive to see the government shifting their focus from the PRS to the wider housing shortage challenge we currently face. There are currently 1.4 million vacant properties across the UK, and encouraging homeowners to sell on these empty properties will help to boost supply in the rental market, allowing for new investment opportunities.
On the other hand, if you currently have properties you are struggling to fill with tenants or are in an unlettable condition, these changes could double your council tax bills. It’s vital to assess your current portfolio and ensure it’s in the best position to boost your profits and not incur further costs.
To see how we can help, get in touch with our friendly mortgage makers on 0345 345 6788 or submit an enquiry here.
