Council tax doubling for empty homes!

[worriedftb]

This is coming into effect from April 1st. This is amazing !

https://www.gov.uk/government/news/crack-down-on-long-term-empty-homes

How do they determine when to apply the charge?

We had 4 years sorting out probate with my parents as executors, the property involved was empty all that time.

This is the sort of thing that sounds like a great idea at first glance but when you dig into it, not so much. Extra council tax isn't going to bother oligarchs who own multiple properties in premium areas. But it might be a real headache for people who have inherited a house that they are struggling to sell - a year's grace might not be enough to sell a house that is in poor repair, or hoarded for instance - yes, when it eventually sells they'll get it back, but that wouldn't help interim cash flow

And how does dad manage the moral issues of travelling to those locations and the effect on the locals?

And how does dad manage the moral issues of travelling to those locations and the effect on the locals?

It seems OP only cares about the U.K. as she says

Our kids - UK kids! How can we do that to our own countrymen/women?

Now that’s selfish and immoral. OP is obviously tying to virtue signal and come across as having high morals, but I’m not seeing that. Oh dear.

Airbnbs are a business so pay Business Rates rather than Council Tax

You shouldn't be claiming Single Person Discount at both. Only your sole and main residence, where your doctors and dentist are registered to ect. The other should be charged as a second home. Council are legally obliged to do checks on properties with SPD and can backdate the charge if you are found to be claiming the discount fraudulently.

Interesting…I didn’t know that. I will amend that with them :)

My question remains though…if I don’t claim the single person discount at either, how will they know one’s a second home and charge double? And it’s not that I want to or am trying to avoid it, I’m just interested to know how they’d determine it was a second home, or even empty?

They apply it immediately which I don't think is fair. I'm Nhs worker who contracted covid from a patient before first lockdown, had long covid for over a year and on zero hours contract but unable to work. Income of only £400 NHS pension a month throughout 2020 but became liable for full council tax on my parent's house in March. Wasn't allowed to rent it out or get estate agents in as lockdown and everything closed. My full income was taken up by council tax between the two houses until I was able to get rid of it.

Oh she struck a nerve 😂

Sounds like you might be the dim one tbh.

Her dad is clearly a business man. If you own several businesses you will know the return is much more profitable and faster compared to property.

Yes property does yield good return as an investment but it takes years to build.

Rent is the slowest & laziest form of income you can rely on.
Having properties just generates wealth as opposed to having several businesses that makes one cash rich.
And with property it’s the generation after you who inherit that gain the most from it tbh.

Also people will be fine without greedy landlords in the market. The issue with housing is the unaffordability of it for those on low income

They would take in more money if they actually reformed council tax so that a 2 adult household is paying the same as a single person household with the discount.

Considering most monwy goes on adult social care at some point that household will get that help as would the single person household yet one has paid more than the other.

I am very happy to be called dim by someone who clearly doesn’t understand how property, business or equity investments differ, as it means I’m almost certainly as not as dim as you 😂

Starting a business can indeed be very lucrative. But, only 50% of new businesses survive 5 years, and they take 4 years to generate any real return. Property generates a return from almost day 1 in most cases. so I am not sure your statement above about it taking years to build, makes sense. Likewise investment in equities will also generate returns pretty quickly.

It’s a matter of risk. Starting a business is risky, but the returns can be high. Investing in property or equities is less risky, and the returns will be lower, but more certain. The point I made about property is that it’s a leveraged investment, which gives a higher capital return than equities. One could and probably should leverage a business if you start one, but that multiplies the risk further. Also, starting a business can be extremely hard work. Equity or property investment requires much less commitment of time, and so is suited to more people.

Also worth noting that one of the wealthiest people in Britain, the Duke of Westminster has an (inherited) portfolio almost entirely based on or generated from property. That’s a ‘business’ that’s lasted 350 years, or, what, 10 generations? It pays tax on the unrealised gains, unlike businesses or individuals, as it’s a trust. If you start a business and expect to become wealthy, it’s worth remembering that only 40% of family businesses make it to the second generation, and 3% to the 4th…. On average they last around 25 years.

I’m looking forward to hearing how getting rid of landlords will improve the housing situation for those who can’t or do not want to buy a house, no matter how cheap they are. Perhaps you could explain that to us?

And as my parting comment, in my experience, the only people who worry about being cash rich are not wealthy. But they’ve done well for themselves. The actual wealthy are not that focussed on cash.

Be thankful you are not in NZ, we have GST (VAT) added to the rates bill and every dollar is taxed. No personal allowance here.

It'll need to be put up by more than that to make a tangible difference. Most people I know won't bat an eyelid.

So they can check your credit file to check where you have activity. This doesn't affect your credit score. You can't be on a normal charge at two properties, the second would automatically be classed as a second home. This covers both empty furnished properties or second homes.

I agree though that this isn't going to encourage people to sell up. If you can afford to run two properties, you can likely afford extra council tax. This is to make money for local councils. Similar to bus lanes in my city. They're tiny and don't really speed buses up all that much as they get stuck 5 meters down the road. They are there to generate income for the council.

@Bishbosch the likelihood that your council is actually making a profit from bus lanes after the cost of creating, maintaining and enforcing them and after the initial period where people don't realise they'll be fined is extremely low. If they aren't working it's far more likely to be bad design.

There be some dodge in it somewhere for those poor second home owners

Speaking for my LA I got a two year grace period after my mum died and then I got a letter saying I owed council tax. No warning that was coming! But seems fair enough (I had struggled to get probate and then clear and sell the house).

I’m surprised you got away with four years.

Most don't register for business rates, and continue to enjoy the "benefit" of free bin collections etc that should be paid for privately because businesses don't get free collections and have to pay.

Those that do register are usually the "one offs" so are eligible for "small business" exemption. So instead of paying the "empty" property council tax, they register for business rates and pay nothing!! Cue the obvious fiddles of where you have 2 holiday lets, you put one in your name, one in your partner's name and hope the council don't realise when you claim business rates exemption for both (councils don't care anyway as they get funding from central government to cover the exempt amount not collected!).

Huge numbers suddenly decided to register at the start of covid when it became general knowledge that you could claim the £10k council grant if you were registered for business rates! Aided and abetted by councils who simply registered everyone who applied and didn't bother to raise back dated bills for all the years they weren't registered nor any fines or penalties for failing to register!! For people with multiple properties, they got £10k per property, even if it was, say, a row of separate holiday cottages such as a converted farm barm into 4 or 5 separate dwellings - £50k ker-ching for the "cost" of business rates for 5 properties that the council didn't bother backdating even for a year!

It may not change many people’s minds but something needs to be done, there are far too many empty/abandoned/second homes and empty shops and offices that could easily be turned into housing but alas we continue building cardboard boxes on green space, it’s a shame councils couldn’t start looking at everything really instead of just one aspect

Actually I just realised my question was a stupid one in respect of probate, because while the property is in probate its part of the deceased's estate, so its not a second home for any of the beneficiaries at that point. It has to be sold as part of the estate.

Sorry I didnt reply properly, we were working with this over covid as well, we had estate agents in, plus house clearance people, people to shut off the utilities etc

How did you become liable if it was part of the estate during probate?

You’re naive if you think this will help housing. Even if the homes were sold or rented they would still be beyond the reach of the income of most people in the areas they’re in.

Im not saying there wasnt council tax due on the property but that was just added to the debt on the estate. I meant in terms of there being a double charge but as I said in another post, I misunderstood because a beneficiary wouldnt have 2 homes due to this (unless they were solely left a property and decided to keep it I suppose)

Why would you personally owe it, its not your property until probate is finalised. We sold the property in order to finalise probate as it formed the estate.

Maybe, but it WILL bring in more revenue for the council for public services. After all, the council are losing out because they'd get full council tax if they were being lived in, and most services cost the same even with a few less people resident.

@soupfiend I have to confess that I don't understand probate properly, for some reason didn't have to do it. Not sure if to do with lowish value or whether because i was the only beneficiary of the property and it was already owned as tenants in common with my step father although he had paid for it. Eventually was able to put up for sale and it sold quickly as just a small 2 bed terraced and was able to split the money between my three sons so they had money towards property.