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10

2.2

Introducing a tax on empty properties

While the availability of affordable housing persists as a nation-wide problem, hundreds of thousands of

homes in the UK remain empty. Empty Homes, an independent charity, estimated that nearly 250,000

privately owned homes in England have been vacant for longer than six months.

Table 3: Number of privately owned homes empty for longer than six months, by region

1

North

East

North

West

York &

Humber

East

Midlands

West

Midlands

East

London South

East

South

West

England

No. of

homes

17,245 54,486 32,108

23,132

25,363

22,350 23,169 30,010 21,555 249,418

Source: Empty Homes

Levying a greater tax on these homes would again reinforce the principle that property owners have a

social and economic responsibility towards their communities. Hence, if they leave the property

unoccupied for six months or longer thereby neglecting this responsibility it is arguably fair for them to

encounter a higher tax.

Until early 2013 owners of empty properties enjoyed a council tax exemption for the first six months and

would get a 50% discount thereafter. Since 2013 this has been abolished and councils can also charge a

50% premium on properties that have been unoccupied for longer than two years. When the changes

were introduced, the justification given by the Institute of Revenues, Rating, and Valuation (IRRV) was

that the government was trying to get a greater yield from council tax in order to keep the overall level

down. The measure was also meant to encourage the occupation of empty homes.

2

Although the

number of empty homes has been declining since 2008 (as shown i

n Figure 3)

, it is still substantial. Hence,

the 2013 council tax reform arguably did not go far enough in encouraging occupation of empty homes.

1 Regional data is from 2012, the most recent year for which detailed data is available

2 Based on remarks by IRRV’s chief executive David Magor to Radio 4.

© Centre for Economics and Business Research for the FairHomeTax Campaign Feb 2015 commissioned by Howard Cox