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11

Figure 3: Number of privately owned homes in England empty for longer than six months

Source: Empty homes organization, Cebr analysis

An alternative to allowing councils to charge a 50% premium after a property has been empty for two

years would be permitting them to charge a 100% premium as soon as six months after a property

becomes vacant. The harsher tax is justifiable under the principle that high numbers of empty homes are

contributing to social erosion. Local businesses such as shops and restaurants struggle to survive if large

portions of neighbourhoods are unoccupied. Additionally, absentee owners tarnish the appeal of the

entire neighbourhood as the quality of the public domain suffers i.e. people would rather live in vibrant,

urbanized environments than in “ghost towns.”

3

Some authorities in Scotland have announced higher rates of council tax on empty properties. For

example, Dumfries and Galloway Council announced that, from 1 November 2014, it would be removing

the discount on empty properties and charging double the full council tax rate on long term empty

homes (both furnished and unfurnished) in the area.

Allowing councils in England to charge a 100% council tax premium on properties that have been vacant

for six months would not only address the issues of absentee ownership and the housing crisis, but

would also generate additional revenue for the exchequer. In 2015-16, the additional revenue

generated would come to nearly £322 million.

3 Based on various remarks from industry professionals including architect Richard Rogers speaking to The Guardian in February 2014

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50,000

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150,000

200,000

250,000

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350,000

2007 2008 2009 2010 2011 2012 2013 2014

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