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More flexibility for councils to reduce Council Tax bills for hard working families and pensioners

Communities and Local Government Secretary Eric Pickles has today published for consultation a series of practical measures that give councils…

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Communities and Local Government Secretary Eric Pickles has today published for consultation a series of practical measures that give councils extra flexibility to help ordinary families with their council tax bills. The proposals sit alongside a second year of council tax freeze announced earlier this year.

The consultation paper Technical reforms of council tax follows the Local Government Resource Review’s commitment to consider what flexibilities local authorities should have to help keep overall council tax levels down. The consultation sets out a series of practical proposals which will help hard-working families and pensioners with their council tax bills.

The proposals include new scope for councils to:

  • Cut council tax for ordinary families, by giving councils the flexibility to remove council tax relief on second homes and empty homes, and use the money to keep overall council tax bills down. Second homes currently receive a 10 to 50 per cent discount. There are a range of discounts of up to 100 per cent for empty homes.
  • Ensure that banks pay their fair share. Under the proposed changes a bank or building society which repossesses an empty home will be liable for the council tax on that property.

These reforms could allow councils to make up to a £20 reduction in the bill for a typical Band D property in England. Getting empty homes back into use will increase housing supply and tackle properties that can attract squatters and vandalism and blight communities.

The paper also consults on the empty homes premium for long-term properties announced by ministers in September. There are no plans to change the rules on council tax relief currently available for homes left empty because a person has moved into a hospital or care home, or has died, or has moved to provide care to another. These are special circumstances where there is a justification for a home temporarily lying empty. Moreover, councils will be encouraged to use their existing powers to apply discretionary discounts in cases where homes are empty due to other justifiable circumstances - for example, hardship, fire or flooding.

The consultation also proposes changes to modernise the council tax system and address potentially unfair future charges. These include:

  • More flexibility on payments. Give local residents a new right to pay their council tax bills in 12 monthly payments, rather than 10 instalments over a year. This will make it easier for local taxpayers to manage their payments, especially those on fixed incomes, like pensioners.
  • Encourage the take-up of electronic billing by reviewing the documents that have to be supplied in hard copy with council tax demand notices. Utility companies routinely offer discounts for customers who pay by e-billing and direct debit, but most councils do not. Local taxpayers would still have the right to request hard copy documents for free.
  • Stopping the “sun tax” on solar panels - ensuring there are no increases in the council tax liabilities of homes as a result of domestic scale photovoltaic solar panels being installed by a third party supplier under a ‘rent a roof’ scheme. These changes will avoid the imposition of a “sun tax” and the need for inspections of homes with solar panels.
  • Review the “double taxation” of self-contained annexes to family homes. Currently, council tax inspectors treat such annexes as a separate property, meaning families get charged twice for the same single property they occupy.

These practical improvements complement other reforms to council tax: confirming there will be no council tax revaluation which would have forced up bills for millions of homes; working with local councils to deliver a two-year council tax freeze; and giving local residents a new right to veto excessive council tax increases.

Eric Pickles, Secretary of State for Communities and Local Government, said:

Council tax bills have more than doubled since 1997. This Government is taking action to keep council tax down, confirmed there will be no council tax revaluation and helped freeze council tax for two years. I want to do more to help everyday families with their cost of living. By treating everyone equally and fairly and removing the special tax breaks for empty homes and second homes, councils have the potential to cut £20 a year off families’ council tax bills. Councils should make it easier to pay bills, and offer the same discounts for electronic billing that other companies offer as standard - this will cut paperwork and reduce tax bills.

Notes to editors

  1. The consultation Technical reforms of council tax can be found here:

  2. The proposed changes include:

(a) Giving billing authorities power to levy up to full council tax on second homes, currently councils can levy a 10 to 50 per cent discount. Councils can already reduce the second homes discount to just 10 per cent - we propose giving councils the local discretion to charge the normal rate of council tax. The job-related second homes discount (where someone has to live in a dwelling because of their job) would be unaffected. The Government has increased the help the Armed Forces scheme gives for service personnel towards council tax.

(b) Replacing empty home council tax exemptions Classes A and C with discounts, the amount of which would be for councils to determine - allowing them to reduce the discount from 100 per cent to 0.

(c) Abolishing empty home council tax Class L exemption (repossessed home), and making mortgagees in possession of empty dwellings (i.e. the banks) liable to council tax in respect of them.

(d) Seeking views on whether billing authorities should be given the option to levy an “empty homes premium” on the council tax payable in respect of properties that have been left empty (for two years or more, for example).

(e) Setting a default assumption that payment of council tax by instalments will be over 12 months rather than (as is currently the case) 10.

(f) Allowing councils to publish online the “Information to be supplied with demand notices”, but with a duty to supply it in hardcopy to any council tax payer requesting it - as an efficiency measure, and to encourage the take-up of electronic billing.

(g) Eliminating potential tax complications from arrangements involving third party suppliers where solar panels are placed on the roofs of dwellings without coming into the paramount control of the resident.

  1. If authorities choose to operate these new flexibilities to maximise revenue in order to relieve upward on council tax, the value would be equivalent to approximately £20 reduction in the bill for a Band D property (averaged across England). In practice, the value will vary considerably between areas, and will of course depend on the discounts actually determined by each billing authority.


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Published 31 October 2011