It is anticipated that approximately 1million home owners who do not live in their properties full time could see their council tax increase in April as automatic discounts are coming to an end in England.

The changes for the 2013-2014 bills rise of around 200% will affect 2nd homes and empty properties in England, where previously properties that were either a 2nd home, empty due to renovation, landlord lets, had been at a discounted rate.

Area councils do not have to increase taxes on 2nd homes and empty properties but the new rules will give the councils more freedom to raise money locally and bring empty homes into use. However, the Institute of Revenues, Rating and Valuation (IRRV) says early evidence suggests most of them are doing so.

Speaking on Radio 4‘s Money Box programme IRRV chief executive David Magor said financial need was forcing them to take advantage of the new rules. “The government is trying to get a greater yield from council tax to keep the overall level down and they are trying to encourage the occupation of empty homes. However, sitting behind this is the funding of the council tax reduction scheme and councils have had to adopt these provisions to find the money to finance those schemes.”

Current Rulings

Altogether, councils must find more than £400m to fund the reduction scheme for low-income families and the 710,000 empty homes and 250,000 2nd homes are a target.  Properties that are empty without future are currently exempt for 6 months in England from council tax payments and then after the 6 months is up they are on a reduced payment of 50%.  Now the councils can decide to charge the full amount from the start with no discounted payments.

A similar scheme is also going to affect vacant properties that are undergoing repairs or alterations.  An automatic exemption ends in April and many councils are then going to be charging the full council tax payment.

In addition, if a property has been empty for 2 years councils can then charge a premium of 50% on top of a full council charge.

For Example: Davey bought a property in Lancashire to renovate whilst he still lived with this parents.  The council tax on this property will rise from under £50 per month to almost £150 per month, as the 50% reduction becomes a 50% premium.

There are no laws against taking a long time to renovate a home but had the councils told them about the changes that were imminent the owner could have tried to push on with the renovations and got it finished so not incur the premium.  The council responsible for this has said they consulted all changes in the autumn 2012, to all affected.

Council tax charges will also be increasing if you are a Landlord owner.  Now, landlords get approximately 6 months free council tax between lettings of unfurnished properties but from April 2013, this will end.

Are you aware of the changes to your council tax charges for your empty properties, 2nd homes and rental properties?  Check your bills as you should have now received your new 2013-2014 charges.

Let us know your comments.