Camden's council tax plan for empty homes questioned

29 Aug 13
Housing experts have queried a plan by the London borough of Camden to use council tax to stop international investors from speculatively buying homes and then leaving them empty.

By Mark Smulian | 30 August 2013

Housing experts have queried a plan by the London borough of Camden to use council tax to stop international investors from speculatively buying homes and then leaving them empty.

Housing experts have queried a plan by the London borough of Camden to use council tax to stop international investors from speculatively buying homes and then leaving them empty.

Camden has called on the government to allow double council tax to be charged on unoccupied homes after successfully using existing powers under the 2012 Local Government Finance Act that allows 50% tax to be charged on homes left empty for more than two years.

Now the borough wants this rate raised to 100%, applied after one year and extended to cover residences claimed by international investors as second homes

Commenting on the proposal, former Housing Corporation chief executive Steve Douglas, now a partner at housing consultancy Altair, told Public Finance: ‘Camden has done well so far, but the challenge would be how to define an [absentee] overseas buyer and tax them.’

Alistair McIntosh, chief executive of the Housing Quality Network consultancy, said anything that brought empty property into use was ‘laudable’. But he added: ‘I’m not sure how they would frame something around foreign investors.’

A Camden spokeswoman admitted to PF that the council had not worked out how a law might be framed to catch such people without penalising those who genuinely live in the borough for part of the year.

‘We’ve asked for the power. If we got it, we would need to go into the fi ne detail,’ she said.

Camden’s call came in a letter to Communities and Local Government Secretary Eric Pickles from Theo Blackwell, cabinet member for finance. He said the 50% rate had already helped to reduce the number of long-term empty homes in the borough from 248 to 162.

Blackwell wrote: ‘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.’

He added: ‘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 a property in order to claim it is a second home and thus avoid the premium.’

Camden council estimated this would bring a further 190 homes back into use. It worries that even if only the very wealthy can afford properties typically used as ‘second homes’, their high values may cascade down the property ladder, making modest housing less affordable.

The National Housing Federation gave the proposal a cautious welcome. Policy leader John Bryant said: ‘Bringing empty homes back into use is an important way of tackling the country’s housing crisis.

‘We welcome Camden council’s proposal to further increase council tax for empty properties, however there are occasionally legitimate reasons why homes are left empty for longer periods of time.’

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