An East London council is clamping down on the number of empty homes in the borough by removing council tax discounts and charging more people with empty second homes a double the rate on the vacant properties. Tower Hamlets Council is set to remove a one-month council tax exemption on empty and unfurnished homes following cabinet approval last night (13 December).
Homes that are unfurnished and have no one living in them currently benefit from a council tax discount during the first month of being empty however, under the council’s new plans, the discount will be removed and will be liable for full council tax from the moment they have become unfurnished and unoccupied.
Meanwhile, from 1 April 2025, the council will introduce a 100% council tax premium on those who own second homes if they are unfurnished and aren’t being lived in by the owner or rented out to others after one year, instead of it currently being two years.
Cabinet member for resources and the cost of living, Saied Ahmed, said the plans will ensure that those with second homes are actually being lived in or rented out to others. Cllr Ahmed said: “The aim of the proposal is to firstly encourage owners of such properties to return them to occupation as soon as possible so that the level of available accommodation is maximised.
“The key elements within the paper are the removal of up to one month’s discount for empty properties and the application of the 100pc premium for empty properties that remain empty for more than a year and increases in premiums for properties that remain empty for more than five or 10 years.”
He added that a premium charge will be issued to people who own second homes in the borough, but the council must give 12 months’ notice under government laws. “Whilst the key aim is to increase housing availability, if owners do not return the property to occupation, they will face an additional council tax charge which will increase council income in return,” he explained.
Tower Hamlets mayor, Lutfur Rahman, called the plans ‘fantastic’ and said they should help with the ‘acute shortages’ of homes that are available to rent in the borough. Mr Rahman said: “…we can do with more supplies and if this encourages people to rent to us, the local authority, then it would be cost-effective and there would be properties in the borough which many of our residents who have moved out of the borough because of homelessness would love to come and [move back] into the borough with us.
“It’s a fantastic policy and very importantly for 2024/25 [will generate] an estimated additional income of £681,000 and the following year just over £2.6million so we could do with every single additional pound in the borough that we will reinvest in public services.”
Chris Boylett, interim head of revenues and benefits at the council, said Tower Hamlets has an ‘incredibly low’ number of empty properties compared to other boroughs. He added that the borough has around 2,300 second homes and as of October 2023, there were 719 homes that had been empty and unfurnished for more than a year.
Mr Boylett said: “…this will hopefully encourage landlords to bring [these homes] back in. If they don’t, the council will get additional money from those. We will probably get a balance of some additional money but hopefully, we will get some more properties on the market as accommodation for residents.”
Cabinet members proceeded to agree and voted in approval of the paper’s recommendations. A council spokesperson told the LDRS: “The second home premium will be 100pc of the charge applicable to that property so a doubling of the charge.
“It will relate to homes that are unoccupied and substantially furnished. We are awaiting final clarifications of those properties that will be exempt from this from the government and would expect these to be provided before the premium is introduced in 2025.”
They added: “It should be noted that the council is taking this, and related decisions related to empty properties to encourage owners to return these properties to the market to increase the availability of housing in the borough.”
