Changes to Council Tax exemptions are a hot topic for landlords at the moment. NLA Director and Local Representative for East Sussex, Tony Richard, tells us more…
The Government will be reducing the budget for Council Tax benefit by 10% as of the beginning of the next financial year (April 2013). This has implications on individuals and properties which have to date been exempt from Council Tax.
In Scotland and Wales, councils will subsidise the reduction in order to provide the same level of support for 2013 as under the current Council Tax Benefit scheme.
In England, local councils will be making up this 10% by increasing the number of people who are eligible to pay council tax. So those who have previously been exempt from council tax, such as those in receipt of council tax benefit, will now be making a contribution whilst those in receipt of pension credit are still exempt.
In addition, the reduction in Council Tax benefit will affect the amount of council tax relief a landlord receives while their properties are empty for improvements or renovations. This is an issue that the NLA has been campaigning on for some time.
Whilst each local council is able to decide upon the exemption period for empty properties in their area, we are concerned that some landlords will be charged Council Tax whilst their property is empty for improvements or renovations.
Worryingly, in some areas such as Hastings, Councils have opted to reduce the Council Tax exemption period for unoccupied properties from six months to just one month.
It is indeed essential that we encourage property owners to bring empty properties back into use. Although most landlords will want to have their properties tenanted for the majority of the time. But it seems that some councils are unaware that there are in fact times when landlords and property owners need to make use of void periods as they present an opportunity to carry out routine repairs and redecoration. Furthermore, the process of marketing, selecting tenants and referencing can take well in excess of 30 days and it is important not to rush landlords and tenants through this process as the right tenant must be found for the property.
In addition, there is pressure on landlords to conduct energy improvements to their properties such as those under the Green Deal, which the NLA fully supports and promotes. But these changes can take time and void periods are an ideal opportunity for landlords to carry out essential improvements for their tenants’ benefit, as well as to future proof their properties and do their bit for the environment.
Instead of requiring landlords to pay Council Tax after 30 days, the National Landlords Association proposes that a 3 month Council Tax exemption period would be more suitable. Such an approach has already been successfully adopted by several councils, including South Norfolk. This allows landlords and property owners to ensure their properties are in the best condition for their tenant.
Ultimately, landlords will always prefer to see their properties tenanted, but they must be allowed to make important improvements and not be rushed through the process of finding the right tenant.