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Council threatens to quadruple Council Tax bills on empty flats

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Our housing correspondent BARRATT HOLMES on the slow introduction of increased local taxes in an effort to deter the borough’s ‘executive apartments’ being used as investment vehicles and not as homes

Innova House, an office-to-residential development next to the Croydon Flyover, has been marketed to Chinese investors

Absentee landlords with homes deliberately left vacant could face punitive annual Council Tax bills of nearly £7,000 under proposals to be rubber-stamped at next week’s Croydon Town Hall cabinet meeting.

The Labour council wants to deter investors from buying up flats in the borough and then leaving them empty, while hundreds struggle to put a roof over their families’ heads.

Using London’s soaring property market as a get-rich-quick scheme has been a popular and tax-efficient option for wealthy Chinese and Middle East speculators for more than a decade, but it has seen hundreds of new flats in the capital left vacant for years at a time, while the owners count their profits in the ever-rising value of their property investment.

Croydon’s burgeoning market in office-to-residential developments has also seen properties here marketed to the Far East.

But with new laws being introduced to deter landlords from leaving their properties empty, Croydon proposes charging them up to four times the usual Council Tax bill.

Local authorities can charge residents 100 per cent of a Council Tax bill if the property is occupied, with an additional 50 per cent if it is left empty for more than two years.

But from April, councils will have stronger legal powers to charge higher rates for long-term empty properties to encourage an increase local housing supply.

Each council can decide how much to charge, depending on the local housing market. The proposals going before the council cabinet on Monday include:

• An immediate additional 100 per cent Council Tax on homes empty between two and five years
• An additional 200 per cent Council Tax on homes empty between five and 10 years – from April 2020
• And an additional 300 per cent Council Tax on properties empty for more than 10 years – from April 2021.

A typical Band C Croydon property pays £1,636.96 annual Council Tax at present (although this is set to rise by 5 per cent from April). Under these proposals, in a couple of years any owner who has allowed such a home to go unlived in since 2011 could be hit with a bill from the Town Hall for £6,875. 

In a statement issued this morning, the council said, “The proposals going before Croydon Council’s cabinet meeting next week would not apply to homeowners with legitimate reasons for having an empty property, including members of the armed forces serving overseas or a home genuinely on the market for sale.”

Alison Butler: threatening big Council Tax bills for empty flats

The council did not explain how it would implement or police the Council Tax penalty system. The council has had a landlord licensing scheme in place since 2015 to uphold acceptable standards of homes in the private rental sector, although it has brought very few prosecutions.

It also has an empty homes team which they say has “worked with local homeowners and developers to refurbish over 350 empty and unused properties back into use over the last three years”.

“Croydon Council has already provided advice, grants and loans so hundreds of private homeowners could refurbish empty and disused houses – so this proposal is about doing even more to get them to turn abandoned buildings into homes for people who need one,” is what Alison Butler, the council cabinet member for empty flats and no council homes, is supposed to have said.

 


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