Thursday, 15 August 2013

Camden to target 'Ghost home' Buy-to-Leave speculators with 200% Council Tax

Government powers introduced last year for local authorities as an “extra weapon in our armoury” to incentivise empty homes back onto the market should surely be extended where councils - like Camden - feel they need it.


Bringing empty homes back into use is a key priority for local authorities, and they will of course choose to pursue a variety of means to meet this objective which they feel politically or operationally acceptable.

Most residential properties in Camden are occupied by the residents as their main home. However, 1 in 16 is not lived in on a full time basis and it is these homes that Camden is keen to see either put quickly back in to use or taxed appropriately.


- removing the Second Homes tax discount of 10% on second homes (the vast majority)
- charging a 50% Premium (150% Council Tax) on properties left empty ('ghost homes') for over 2 years.

Since agreeing to a new 150% Council Tax Premium on long-term empty properties last year, the number of properties in Camden has fallen by 34.7% from 248 to 162. 

The table below shows where these properties are in the borough, with exclusive Frognal ward leading the way with Ghost Homes.

Camden now wants to extend the Premium and see a change to the law in relation to unoccupied, furnished property to prevent what the press have called "Buy-to-Leave” international investors from gaming the system and claiming empties are 'second homes' and thus avoiding the extra charge. 

We estimate that, out of a total of 380 homes empty between one and two years, a further 190 would be brought back into use if a premium of 100% Council Tax were to be charged after one year, further assisting supply.

This week I wrote to Conservative Local Government Cabinet Minister Eric Pickles asking for more powers to vary Council Tax.

The Council Tax Premium for long term empty homes

I am writing to inform you of the success in Camden of the Council Tax premium for empty homes and to ask you to consider extending the powers available to local authorities in this area.  

You will recall that the Government gave local authorities the flexibility in the Local Government Finance Act 2012 to raise up to an additional 50% council tax from properties that have remained empty for more than two years.

Bringing empty homes back into use is a local priority in Camden as well as for the Coalition government. It is a key plank of our strategy for the private rented sector which in turn supports our strategic priority to promote sustainable neighbourhoods.

We believe the premium is effective in encouraging empty home owners to bring their properties back into full time use, contributing to the housing supply to meet local needs. In addition, empty property is susceptible to squatting with the associated risk of fires, criminal damage, stripping of fixtures from properties and anti-social behaviour. Reducing the risk of such activity can only contribute positively to neighbourhood well being.

This is borne out by our experience in Camden since adopting the premium.  While the additional Council Tax income from premiums is relatively modest and recycles back into the collection fund for the benefit of all taxpayers, its real effect of bringing empty homes back into use can be clearly seen in Camden. Since agreeing to adopt the premium in December 2012 and publicity in the local and regional press, the number of long term empty properties in Camden has fallen by 34.7% from 248 to 162. The relationship between the drop and the introduction of the premium is surely no coincidence.

We would like to draw to the Secretary of State’s attention the demonstrable effectiveness of this policy and to ask him to consider giving local authorities the discretion to reduce the minimum period from two years to one year and to levy a premium of up to100% (i.e.; double council tax).

We would also like to see a change to the law in relation to unoccupied, furnished property to prevent what the press have called “Buy to Leave” international investors from storing a few sticks of furniture in aproperty in order to claim it is a “second home” and thus avoid the Premium.

We estimate that, out of a total of 380 homes empty between one and two years, a further 190 would be brought back into use if a premium of 100% Council Tax were to be charged after one year.

Housing costs and availability are consistently one of the biggest concerns for our residents and we believe we have reached a crisis point in private rented sector housing in the borough. The additional powers as outlined above would be one way alongside others for the council to make a further progress on the supply of housing in the borough.

Needless to say, the Camden Tories (who have a number of property managers in their Town Hall ranks) have immediately snubbed this ask in the New Journal, accusing us of interfering in "private, personal housing choices" and questioning how we would do this impartially. 

However, since our call - we've received the backing of the Empty Homes Network and supportive tweets from Homes from Empty Homes

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