Thursday 3 September 2015

Warrington Landlords - Warrington Council Tax review



Over the weekend I received an email from a Warrington Property Blog reader and who is also a Landlord in Warrington with some concerning news regarding council tax for empty properties and second homes in Warrington. I want to share this with all my readers to keep you up to date with the situation and to also have one place (this blog) to come and read everything you need to know about this and to follow the right steps to express your views and complete the online survey.

In April 2013 the government allowed councils to change the level of Council Tax discount for certain empty properties and second homes. Warrington Borough Council implemented some of these changes in 2014, and is now considering further amendments to the scheme.

As a council Warrington are committed to ensuring all their residents have the opportunity to have their say on changes to services. They would like your views on proposed changes to levels of Council Tax for empty properties and second homes.


Current Council Tax discounts on empty properties
  • No council Tax to pay for three months after the property becomes empty and unfurnished.
  • 25% discount on Council Tax for properties that are empty and unfurnished for over three months.
  • No Council Tax for 12 months on properties that are empty and require or are undergoing major structural repair work to make them habitable ( known as uninhabitable properties) 
The New Proposals
  • Where property becomes empty and unfurnished usually no council tax charge for 3 months - New proposal means no council tax for 1 month
  • Properties that are empty and unfurnished properties for less than 2 years get 25% council tax discount - New proposal means zero council tax discount after one month

In my opinion the proposed amendment will increase landlords' operating costs significantly (most tenants are required to give at least one months notice to their current landlord, thus the prospect of a property which becomes empty being re-let within a month is slim). It should be remembered that the recent budget reforms have already increased landlords costs as mortgage interest is no longer capable of being offset against profit. An additional expense will almost, if not completely, extinguish landlords margins. That will only be exacerbated if and when interest rates increase in the near future increasing mortgage interest.

By increasing costs to private landlords, private rent will inevitably increase to cover the additional expense. That will affect private paying tenants significantly and particularly at a time when current austerity measures have strained household budgets. The proposed changes would likely to result in more families who are already struggling to make ends meet being simply unable to afford their rent, and in turn those families will likely look to WBC as a housing authority for assistance. This will increase not just the administrative burden on WBC (which every rate payer will bear) but also significantly impact the Council's housing stock available for those who need it. In the event that the housing authority needs to let directly from private landlords at times of stock shortage, the costs of providing temporary accommodation to the authority will be increased.

It is imperative that a full and proper impact assessment is performed before any such changes are implemented. One might suggest that the amount of money likely to be raised from landlords as a result of the proposed change will be modest (at best one or two months after the exemption period), however the true cost of the changes to the authority is likely to be far more significant.

I would also urge the authority to consider the fairness of the proposed changes. Whilst the property is empty neither council, police or fire services are being used by the non-existent occupiers. There must be considerable doubt over whether it is reasonable to place an additional charge for those services in the circumstances.

Finally, it should not be forgotten that changes to tax payable on empty properties were significantly changed as of 1 April 2014. Whilst there may have been some merit in reducing the six month exemption period to three months, and reducing the discount from 50% to 25%, to go further in such a short period of time and without any fair or reasonable justification is unsatisfactory to say the least.

I would urge all Warrington residents to complete the consultation and let your views be known.

I did contact Warrington Guardian and they published this story a few weeks ago here:

http://www.warringtonguardian.co.uk/news/13601622.Private_tenants__likely_to__feel_costs_of_proposed_council_tax_discount_changes/



FULL CONSULTATION DOCUMENT AND CASE STUDIES CAN BE FOUND BELOW:



Survey:



Email your Views:

revenues&benefits@warrington.gov.uk


To ask for a paper copy of the survey or if you have any concerns or questions about the survey, require the questionnaire in another language or format
including large print, Braille, audio or British Sign Language or simply require assistance in completing it please call 01925 44 3210 or email them using the email link above

The closing date for responses is Friday 18 September 2015.

The information from this consultation will be used by the council to assist in making its decision on the changes to Council Tax Discounts from 1st April 2016.

The results from the consultation will be published later this year on their website and the council’s executive board will also receive a report of findings and recommendations.

The final decision on the scheme will be made by the council no later than 31 January 2016.


Elements reproduced from the Warrington Council website article: http://www.warrington.gov.uk/info/200352/consultations/1924/consultation_to_review_council_tax_discounts_for_empty_properties_and_second_homes





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