§ The Minister for Local Government and the Regions (Mr. Nick Raynsford)
In the light of responses to last November's consultation paper on proposed changes for second homes and long term empty homes, we have decided to give local authorities new discretion in relation to council tax discounts and exemptions.
Firstly, we will allow English local authorities to reduce council tax discounts on second homes from 50 per cent to a minimum 10 per cent. Authorities in the areas where the discount has been reduced will retain any additional council tax raised. We do not propose to reduce their revenue support grant to reflect their ability to raise more council tax. The changes could raise an estimated extra £65 million in England and authorities will be able to decide how to spend this money to improve local public services, such as affordable housing, transport or policing.
We have decided not to remove the discount completely because owners need an incentive to inform the local authority that properties are second homes. Without such information, local authorities would not be able to identify the extra revenue which could be raised from changing the discount.
We recognise the special position of those who are required to live in tied accommodation provided by their employer or because of a legal requirement, such as a condition of a licence. A discount of 50 per cent will continue to apply in these cases.
Secondly, we will allow English local authorities to reduce or remove completely the current 50 per cent council tax discounts on long term empty dwellings. Authorities will not retain any additional revenue raised. This is because we believe that decisions on whether to end the discount should be based purely on whether the measure is likely to make owners consider bringing their properties back into use.13WS
Thirdly, we will give local authorities in England and Wales powers to create their own discounts and exemptions, including powers to grant relief on a case by case basis. Authorities exercising these powers will meet the costs of any new discounts or exemptions.
These decisions follow consultation on the proposals which demonstrated strong support for the reduction of discounts on second and long-term empty homes.
An analysis of the responses to the consultation exercise has already been placed in the Library of the House and on the web-site of the Office of the Deputy Prime Minister.
These measures require primary legislation. As we said in the consultation draft of our Local Government Bill published on 12 June, we plan to add these measures to this Bill before it is introduced.