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Helping to tackle city's housing pressures

24/02/23 

Owners of long-term empty properties in Cardiff could be facing a further increase in their council tax charges under new plans to help alleviate pressures on housing availability in the city. 

From April, a council tax premium of 50% could rise to 100% for homes left unoccupied and unfurnished for more than a year in a bid to encourage owners to bring these properties back into use.

Second homes in the city and furnished dwellings that are not anyone's main home could also be charged a premium of 100% from April 2024 if recommendations being considered by Cabinet at its next meeting on Thursday, March 2 are approved.

The Housing (Wales) Act 2014 gave councils the discretion to apply a premium of up to 100% on top of the standard rate of council tax for long-term empty dwellings and since April 2019, a premium of 50% has applied to these properties in Cardiff. The Act also enabled councils to charge a premium of up to 100% on properties occupied only periodically.

The regulations have recently changed and Local Authorities now have the power to charge premiums of up to 300% of the annual Council Tax charge.

Cabinet Member for Finance, Modernisation and Performance, Cllr Chris Weaver, said: "Empty properties not only cause issues such as nuisance, vandalism, criminal activity, and visual deterioration, they are a wasted resource. Given the housing pressures we're currently experiencing, it's essential we do everything we can to increase the availability of homes.

"The Shared Regulatory Services monitor empty homes in the city and incentivise owners to act positively to bring properties back into beneficial use in several ways, but the number of long-term empty properties charged a council tax premium has actually increased since we first introduced the 50% premium, suggesting a 50% additional charge may not be enough as an added incentive to bring properties back into use.

"While we have the power to apply a 300% charge, increasing by the proposed levels would help ensure payments are received as well as allowing us to consider any impact on the housing market and plan a way forward accordingly.

"The option to increase the rate on these homes of up to 300% in the future would be available if we feel that would improve the housing situation in the city."

This year's figures show that there are 1,232 properties in the city that are empty for more than six months at any one time, while records show there are nearly 3,000 homes considered to be dwellings that are not a person's sole or main residence and are furnished.

Cllr Weaver added: "These are significant numbers which are having a real impact on the availability of housing stock in the city.  The majority of Welsh councils are now charging some form of premium and our recent consultation showed considerable support for these proposals."

Consultation was carried out earlier this year and the overwhelming majority of responders (78%) support the proposal to increase the premium on long term empty property from 50% to 100% while 73% of responders also agree with the proposal to charge a 100% premium on second homes and furnished dwellings that are not anyone's main home.

Additional funds generated by implementing council tax premiums would be used to help meet local housing needs. The existing premium of 50% on long term empty properties is generating around £400,000 each year which could rise to around £700,000, if the recommendations are progressed.

Potential additional income from a premium charge on second homes and furnished dwellings that are not anyone's main home could be in the region of around £2.1m. The earliest this change could take place is April 1, 2024, following a one year notice period.

The full report is available to read  here.

If recommendations are agreed by Cabinet on March 2, the proposals will be considered by Full Council on Thursday March 9.