Agenda item

The Environment and Community Panel and the Regeneration and Development Panel have been invited to attend for this item.

 

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The Environment and Community Panel and Regeneration and Development Panel was also present for this item.

 

The Chair explained that the report would be split into two sections:  Long Term Empty Homes and Second Homes to allow all Councillors to contribute to the Long Terms Empty Homes.

 

Long Term Empty Homes

 

The Revenues and Benefits Manager presented the report and explained that the Levelling Up and Regeneration Act 2023 introduced powers for billing authorities to charge the existing 100% premium for long term empty properties after one year, rather than the current period of two years, and to charge an additional council tax premium of up to 100% for second homes.

 

The Panel was advised that for council tax purpose an empty property was defined as one which was unfurnished and no-one’s main home.  A long-term empty property was one which had been empty for more than six months after any property exemptions had ended.

 

It was explained that the Council currently charged a 100% premium once a long-term property had been empty for two years.  Section 79 of the Act now allowed the Council to charge the premium after one year from 1 April 2024.  This would mean a further 555 properties becoming liable for the 100% premium.  Further details were set out at section 3.

 

The Revenues and Benefits Manager advised that a resolution was required from Full Council by 31 March 2024 to implement the Act from 1 April.

 

The Portfolio Holder for Finance commented that it was self-evident that this was an incentive to release homes for occupation and commended the report to the Panel to go forward to Cabinet and Full Council.

 

The Chair invited Councillors under Standing Order 34 to address the Panel. 

 

There were no questions from Councillors attending under Standing Order 34.

 

The Chair invited questions and comments from the Panels, a summary of which is set out below.

 

Councillor Dickinson referred to section 3.2 of the report and commented that it would have been useful for the Panel to receive the information by each parish area which would give more of an indication where the issues were and if there was movement in an area. 

 

Councillor Dickinson asked for a definition of when an empty property commenced.  In response, the Revenues and Benefits Manager explained that there were a number of exemptions which did not count against the timescale for working out the empty property start date, the main being waiting probate where the owner had passed away.

 

Councillor Long asked how many homes had been brought back into use previously.  The Revenues and Benefits Manager explained that there was movement in properties being brought back in use but it was difficult to determine when a property had become occupied.

 

The Chair referred to the Equality Impact Assessment (EIA) and one line which stated there were no equality issues and added that there was a reasonable timescale if the report was accepted and went forward to complete a full assessment to include the number of residents affected.  In response, the Revenues and Benefits Manager explained there was a full EIA attached to the Cabinet Report and undertook in future to ensure reference was made to this.

 

Following comments from Councillor Bearshaw, the Chair stated that it would be useful if Councillors could be provided with a list of exceptions for reference purposes.

 

The Chair commented that the Panel could request an update in 12 months’ time.

 

The Chair made a plea to Cabinet to use this tool to liaise with Freebridge Community Housing to raise the issue of the length of time taken to deal with void properties and bring them back into use.

 

Second Homes

 

Councillor Dickinson declared a pecuniary interest and left the meeting during consideration of the second homes element of the report.

 

The Revenues and Benefits Manager explained that there was an Equality Impact Assessment in the Cabinet Report and undertook to cross reference it.

The Revenues and Benefits Manager presented the report and explained that for council tax purposes a second home was defined as a one which is furnished but which was no one’s main home.  Section 80 of the Act now allowed the Council to charge a premium of up to 100% for second homes from 1 April 2025, meaning that taxpayers will pay double the standard council tax charge for a second homes.  It was reported that there were 3,200 second homes in the borough and charging an additional 100% premium on those properties will raise an extra £6.5m a year in council tax.  Further details were set out at section 4 of the report.

 

The Portfolio Holder explained that it the Council retained second homes money that this should be invested in the borough and commended the report to the Panels to go forward to Cabinet and Full Council.

 

The Leader addressed the Panel and explained that discussions were ongoing with North Norfolk District Council who had second homes but added that there were other districts who had few second homes.  The Panel was advised that negotiations would take place with Norfolk County Council in the near future as it would affect budgets going forward in 2025.

 

The Chair invited Councillors attending under Standing Order 34 to address the Panel.

 

Councillor Colwell commented that the report set out a sensible way forward and highlighted the importance of bringing back properties into occupation for the local community  Councillor Colwell asked if it was possible to consider ring-fencing the income to build homes.  In response, the Leader advised that this would be a decision of Cabinet and Full Council.

 

The Revenues and Benefits Manager responded to questions from Councillor Bearshaw on information being available to understand the trends of second homes.

 

Councillor Long provided background information as to previous arrangements and outlined how the income from second homes could help to alleviate the housing pressures by providing affordable homes in a variety of ways for local people.

 

The Revenues and Benefits Manager responded to questions from Councillor Ryves on individual homes potentially being used for business purpose and subject to business rates.

 

The Revenues and Benefits Manager responded to comments and questions from Councillor Ryves on individual homes which might be considered either business or income earning not attracting business rates and what controls were in place to address this and effect on the Council. The Revenues and Benefits Manager undertook to circulate the list of properties subject to business rates.  It was explained that the Valuation Office controlled whether a property was business rates or council tax and advised that the Valuation Office was currently undertaking a review and were part of HMRC.

 

The Revenues and Benefits Manager responded to questions from Councillor Sayers in relation to foreign nationals in the UK who were resident elsewhere and how the Council enforced this situation.

 

Councillor Osborne commented that there had been a useful discussion and agreed with the policy and was something that should be a real benefit to West Norfolk.  Councillor Osborne provided an overview of the practice adopted in Wales, together with trends experienced.  In conclusion, Councillor Osborne stated that he supported the proposal.

 

The Revenues and Benefits Manager responded to questions from Councillor Nash on how the Council determined if a foreign national’s home was a second home.

 

Councillor Ring outlined his experience on providing advice on second homes over a number of years and added that from a tax point of view, if a person changed their main residence to London, upon sale of that property would expose themselves to Capital Gains Tax.

 

Under Standing Order 34, Councillor Bubb commented the second home owners who were well off additional tax would not be an issue, but those who were no so well off it was easy to change it to a small business and get rate relief, etc         In response, the Revenues and Benefits Manager explained that the Valuation Office was currently working through a list and the Council was monitoring the movement between council tax and business rates.

 

Councillor Parish commented that a principal residence could be determined by where the occupants were registered with a doctor.

 

The Chair summarised the debate of the Panels and highlighted the importance of striking a balance and added that there had been a lot of talk around people with big properties in the Borough coming up from London.  The Chair added that there were also a number of second homes where people lived on one area of the Borough and had a bolthole on the coast.  Some people had a holiday home for over 20 years, visited on an annual basis, contributed to the economy and seen to be helpful and useful neighbours with an aim to retire in the borough.  The Chair added that care should be taken with the narrative, encourage investment and look at the opportunity to strike a balance.

 

The Chair expressed concern that if the Council looked to do this quickly within a year, the council tax bandings were not included in the report and there were also other variables to consider.  The Chair concurred with the comments made by Councillors Long and Colwell in that the additional money received should be make good use of.

 

The Chair thanked the Revenues and Benefits Manager for the report.

 

RESOLVED:  The Panel noted the options available for the premiums and agrees to recommend to Cabinet to recommend to Council that:

 

•          The long-term empty premium is charged once a long-term property has been empty for one year rather than two years.

•              The second home premium is introduced from 1 April 2025 at the maximum level of 100% to generate the most additional income.

•          We work with other Norfolk authorities and Norfolk County Council to ensure the maximum possible amount of the additional second homes income is returned to those boroughs most affected by second home ownership.

•          Authority is delegated to the Revenues and Benefits Manager, in consultation with the s151 Officer and Council Leader, to agree the technical guidelines for any exceptions to the premiums imposed by central government.

 

The Panel adjourned at 6.19 pm and reconvened at 6.30 pm.