MANSFIELD DISTRICT COUNCIL
Report of Head of Finance, Property and Revenue Services
To
Deputy Mayor and Portfolio Holder for Resources
On
25 March 2013
COUNCIL TAX: EMPTY PROPERTIES- COMMENCEMENT OF CHARGING
PERIODS
1.
SUMMARY
On 15 January 2013 a delegated decision was taken to vary the charges and time
duration relating to the Council Tax levied on certain empty homes and second
homes.
The report approved was titled Amendments to Council Tax Discounts and
Exemptions.
The legal basis for the decision are the powers granted by the Local Government
Finance Act 2012.
Since the decision was taken, it has become necessary to clarify charging levels
after 1 April 2013 relating to properties affected by unexpired exempt periods.
The purpose of this report is to remove any ambiguity.
2.
RECOMMENDATIONS
To be resolved by the Deputy Mayor and Portfolio Holder for Resources
(i)
That any period of previous Council Tax exemption which applies to empty
properties covered by the provisions of exempt property Classes A and C and
which extends beyond 1 April 2013 be allowed to continue to the original
expiry date.
(ii)
That the Council Tax levied on properties identified within the terms of
recommendation (i) above, be subject to the relevant discount and charge
effective from 1 April 2013 in accordance with the provisions of the delegated
decision approved on 15 January 2013 and shown on Table 1 in this report.
3.
BACKGROUND
3.1
The Local Government Finance Act 2012 allows billing authorities (Mansfield
District Council is a billing authority) to vary the percentage of Council Tax
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charged and also the time duration allowed to certain empty properties, these
are:



empty and unfurnished homes;
properties empty due to undergoing structural alteration and
uninhabitable;
second homes
The chart below shows the position relating to these empty property
categories before and the effect on charges after the 15 January 2013
delegated decision. The new discounts and revised changes are effective
from 1 April 2013.
Table1
Discount or Exemption
Pre 1 April 2013 After 1 April
2013
(resulting from
Discount/
Decision
on
Exemption%
15/1/13)
Charge Due%
Discount %
Charge Due%
Empty Exemption 100% Discount 75%
First 6 months
Charge NIL
Charge 25%
(Class C exemption) Discount Class
C from 1 April 2013
Long Term empty
(over 6 months)
Discount 50%
Charge 50%
Discount Nil
Charge 100%
Structural alteration and uninhabitable – Exemption 100% Discount 25%
First 12 months followed by full charge Charge NIL
Charge 75%
(Class A exemption) Discount Class
D from 1 April 2013
Second Home
3.2
Discount 50%
Charge 50%
Discount NIL
Charge 100%
Prior to 1 April 2013 properties empty and unfurnished are entitled to receive
a six month period of full exemption where no Council Tax is payable.
The same rules apply to properties undergoing structural alteration which
render them uninhabitable except that these properties receive a maximum 12
months exemption.
MANSFIELD DISTRICT COUNCIL
These two classes of exemption are abolished by The Council Tax (Exempt
Dwellings) (England) (Amendment) Order 2012 on 1 April 2013.
The two exemptions are replaced by two discounts. These discounts are
introduced by The Council Tax (Prescribed Classes of Dwellings) (England)
(Amendment) Regulations 2012.
The percentages of discount and time duration are discretionary matters for
each billing authority to determine.
There is no further clarification required in relation to second homes.
The delegated decision taken on 15 January 2013 introduces the changes
illustrated in the last column of the table on the previous page.
3.3
It is the unexpired exempt period and the level of charge to be applied to the
former Class A and Class C properties in the period from 1 April 2013 to the
end of former exemption date which needs to be addressed.
This issue is illustrated by the details in the example below:
Property empty and unfurnished from 1 January 2013
Under the regulations which expire on 31 March 2013, the owner is
entitled to a six month exemption which expires 30 June 2013
From 1 April 2013 – Exempt Class C is abolished and replaced by
Discount Class C. The Council has determined this to be a 75%
discount/25% charge as part of the delegated decision made on 15
January 2013.
On 1 April 2013 the remaining 3 month timeframe continues on to 30
June 2013
For the remaining 3 months from April 1 to 30 June there is a charge of
25%.
After 30 June 100% Council Tax will be payable.
3.4
Since the issue of letters to owners in February advising of the revisions to
charges on empty properties and second homes, some owners have
assumed that the remaining former full exemption period will continue until it
reaches the original expiry date. This was not the intention of the policy.
When the policy was written no specific reference to these factors was
included in the report or in the recommendations.
The intention of the policy approved on 15 January 2013 was that existing
former period of exemption continue into the new financial year and beyond
until its original expiry date. However, from 1 April 2013, the relevant charge
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is levied i.e. in the example above a 75% discount is applied to 30 June
2013 (resulting in a 25% charge.
After the remaining three months of the former exempt period 100% of the
Council Tax becomes due.
The same principle applies to former exempt Class A (Discount Class D form
1 April 2013.
It was not the intention in the report approved on 15 January 2013 to reset
the clock to start any exempt or nil charging period again from 1 April 2013.
4.
OPTIONS AVAILABLE
The options are:
a) Do nothing. This could lead to confusion and ambiguity and potential
appeals where the issue has not been clarified by a Council decision.
b) Take the opportunity in advance of 1 April 2013 to clarify and set out
the Council’s position and minimise any risk of successful challenge,
ultimately to a Valuation Tribunal.
5.
RISK ASSESSMENT
Risk
Risk Assessment
Reputational
There is the potential for Med.
confusion and challenge on
the issue from property
owners.
6.
Risk
Level
Risk Management
The recommendations in
this report address the
issue fully and set out the
clear policy intention.
ALIGNMENT TO COUNCIL PRIORITIES
Not directly applicable to this report.
7.
IMPLICATIONS
(a)
Relevant Legislation
Local Government Finance Act 2012
The Council Tax (Exempt Dwellings) (England) (Amendment) Order 2012.
(Statutory Instrument 2012 No. 2965)
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The Council Tax (Prescribed Classes of Dwellings) (England) (Amendment)
Regulations 2012. (Statutory Instrument 2012 No. 2964)
(b)
Human Rights
There are no direct breaches of any individual’s Human Rights as a result of
this report.
(c)
Equality and Diversity
There are no implications as a result of the recommendations in this report.
An Equality Impact Assessment was undertaken relating to the substantive
decision taken on 15 January 2013; this was assessed as having a low
impact.
(d)
Climate change and environmental sustainability
No implications
(e)
Crime and Disorder
No implications
(f)
Budget /Resource
No implications
8.
9.
COMMENTS OF STATUTORY OFFICERS
(a)
Head of Paid Service – No specific comments
(b)
Monitoring Officer – No specific comments
(c)
Section 151 Officer – None, own report.
CONSULTATION
None
10.
BACKGROUND PAPERS
None
Report Author:
Designation
Telephone
Email
Ian Kirk
Revenues and Customer Services Manager
01623 463008
Ikirk@mansfield.gov.uk