Council
14/12/11
Agenda Item No___11__________
DETERMINATION OF COUNCIL TAX DISCOUNTS RELATING TO SECOND HOMES
AND LONG TERM EMPTY PROPERTIES FOR 2012/13
Summary:
Conclusions:
Recommendations:
To determine the level of council tax discounts to be established for
second homes and long term empty properties for 2012/13, in
accordance with section 11A of the Local Government Finance Act
1992 as enacted by section 75 of the Local government Act 2003.
Section 75 of the Local Government Act 2003 provides local
authorities with the power to make changes to the level of council tax
discount in relation to second homes and long term empty properties.
The Council has to approve its determinations afresh for each
financial year. The calculation of the tax base for 2012/13 will be made
on the assumption that the determinations recommended below will
apply.
RECOMMENDATION
Members are recommended to resolve that, under section
11A of the Local Government Finance Act 1992, as
enacted by section 75 of the Local Government Act 2003,
and in accordance with the provisions of the Council Tax
(Prescribed Classes of Dwellings)(England) Regulations
2003 as amended, the Council determines that:
(i)
the council tax discount for dwellings defined as
being within Class ‘A’ under regulation 4 of the
Council
Tax
(Prescribed
Classes
of
Dwellings)(England) Regulations 2003 remains at
50% for the year 2012/13.
(ii)
the council tax discount for dwellings defined as
being within Class ‘B’ under regulation 5 of the
Council
Tax
(Prescribed
Classes
of
Council
14/12/11
Dwellings)(England) Regulations 2003 be reduced
to 10% for the year 2012/13 with the exceptions of:
a)
those dwellings that are specifically
identified under regulation 6 of the Council
Tax
(Prescribed
Classes
of
Dwellings)(England)
Regulations
2003,
which will retain the 50% discount; and
b)
those dwellings described or geographically
defined at Appendix B, which, in the
reasonable opinion of the Deputy Chief
Executive, are judged not structurally
capable of occupation all year round and
were built before the restrictions of seasonal
usage were introduced by the Town and
Country Planning Act 1947, which will retain
the 50% discount.
(iii)
the council tax discount for dwellings defined as
being within Class ‘C’ under regulation 7 of the
Council
Tax
(Prescribed
Classes
of
Dwellings)(England) Regulations 2003 be removed
for the year 2012/13, thereby making the full council
tax charge payable after the six month exempt
period.
(iv)
in accordance with section 11A(6) of the Local
Government Finance Act 1992, as enacted by
section 75 of the Local Government Act 2003, these
determinations shall be published in at least one
newspaper circulating in North Norfolk before the
end of the period of 21 days beginning with the
date of the determinations.
Cabinet member(s):
Ward(s) affected:
All
All
Contact Officer, telephone
number, and e-mail:
1.
Sheila Oxtoby – 01263 516077
sheila.oxtoby@north-norfolk.gov.uk
Introduction
Section 75 of the Local Government Act 2003 gives local authorities the power to
change the discount on second homes and long term empty property.
2.
Section 75 of the Local Government Act 2003
Council
14/12/11
The legislation provides local authorities with the power to make changes to the level of
council tax discount in relation to second homes and long term empty properties as
follows:
• Discounts for Second Homes
All billing authorities are able to change the nationally set 50% council tax
discount for second homes to a minimum 10%. Where this ability is exercised,
local authorities (including major precepting authorities) retain any additional
income received from reducing the discount. It is the billing authority that bears
the cost of collection burden. The exception to this rule is that billing authorities
cannot change the discount for second homes of people who are liable for
Council Tax on dwellings provided by an employer, i.e. tied accommodation, as
established under regulation 6 of the Council Tax (prescribed classes of
dwellings) (England) Regulations 2003.
• Discounts for Long Term Empty Property
All billing authorities are able to reduce or remove completely the nationally set
50% council tax discount for long term empty property. Local authorities
(including major precepting authorities) do not retain the benefit of any additional
income received from reducing or removing these discounts as adjustments are
made to the revenue support grant, but the billing authority still bears the cost of
collection burden.
It is for the billing authority to determine whether any such changes on discounts for
second homes and long term empty properties apply to all or parts of its area. An area
can be as small as one property (provided it can be defined geographically) and different
discounts can apply in different parts of the area.
3.
Classes of Property
The regulations differentiate between three classes of property:
4.
•
“Class A” properties are those which are not an individual’s sole or main residence,
are furnished and have seasonal planning prohibition (i.e. preventing occupation for
a continuous period of at least 28 days).
•
“Class B” properties are those which are not an individual’s sole or main residence,
are furnished and have no restrictions with regard to occupation.
•
“Class C” properties are those which are unoccupied and substantially unfurnished
on a long term basis of over 6 months (properties empty for less than 6 months are
exempt from council tax).
Formal Determinations
Council
14/12/11
The Council established its policy with regard to discounts on second homes and empty
properties at its meeting on 17th December 2003. In summary, this retains the 50%
discount on “Class A“ properties, reduces the discount on “Class B” properties to 10%
with certain exceptions principally with regard to properties considered incapable of year
round occupation, and removes all discounts from “Class C” properties.
The Council has to approve its determinations for each financial year. The
determinations recommended above reflect a continuance of the existing policy on
council tax discounts. It should be noted that the schedule of Class “B” property
exceptions shown in Appendix B and referred to in recommendation ii) b) above, is
believed to include all dwellings potentially entitled to retain the 50% discount for the
year commencing 1 April 2012 for the reason stated. Under the wording of the 2003
regulations, changes cannot be made to the schedule once the determinations have
been made. Should further properties be notified to the Council for possible inclusion in
the list for exemptions, they may only be added when the determinations for 2013/14 are
made for operation from 1 April 2013.
5.
Financial Implications
The calculation of the tax base for 2012/13 will be produced on the assumption that the
determinations recommended above will apply. The tax base calculation for 2012/13
being considered later on the agenda for this meeting shows that of the total tax base of
41,366 a total of 1,320 (3.19% of the tax base) Band D equivalents are from the
additional yield from second homes and 343 (0.83% of the tax base) Band D equivalents
are from empty properties arising from these determinations.
6.
Risks to the Council
Should the determinations recommended below not be adopted for 2012/13, there will
be a significant reduction in the Council’s tax base with a potential direct impact on the
level of council tax and / or the ability to finance the budget for 2012/13. Additionally
funding support from Norfolk County Council for the Big Society Fund (which currently
reflects a proportion of its share of council tax on second homes) may be at a higher
level of risk.
The government is currently consulting on proposals to give billing authorities (such as
North Norfolk District Council) greater discretion over the reliefs from council tax
available in respect of second homes and some empty properties. Work is currently
being undertaken to assess the potential impact of any changes, but these are not likely
to be effective until 2013/14.
This report proposes the discount for Class B properties is reduced to 10% and the
discount for Class C properties is removed. The option to further reduce discounts
suggested in the consultation is unlikely to result in significant additional income for the
Council. The additional income generated from a further reduction in discounts would be
shared with Norfolk County Council and Norfolk Police Authority, in proportion to their
individual council tax amounts. Consequently they will receive the bulk of any additional
income when compared to this Council’s share.