Eric Pickles: More flexibility for councils to reduce council tax bills for hard working families and pensioner

Published on Monday, 31 October 2011 15:48
Posted by Matthew Abbott

Communities and Local Government Secretary Eric Pickles has today published for consultation a series of practical measures that give councils extra flexibility to help ordinary families with their council tax bills. The proposals sit alongside a second year of council tax freeze announced earlier this year.

The consultation paper Technical reforms of council tax follows the Local Government Resource Review's commitment to consider what flexibilities local authorities should have to help keep overall council tax levels down. The consultation sets out a series of practical proposals which will help hard-working families and pensioners with their council tax bills.

The proposals include new scope for councils to:

  • Cut council tax for ordinary families, by giving councils the flexibility to remove council tax relief on second homes and empty homes, and use the money to keep overall council tax bills down. Second homes currently receive a 10 to 50 per cent discount. There are a range of discounts of up to 100 per cent for empty homes.
  • Ensure that banks pay their fair share. Under the proposed changes a bank or building society which repossesses an empty home will be liable for the council tax on that property.

These reforms could allow councils to make up to a £20 reduction in the bill for a typical Band D property in England. Getting empty homes back into use will increase housing supply and tackle properties that can attract squatters and vandalism and blight communities.

The paper also consults on the empty homes premium for long-term properties announced by ministers in September. There are no plans to change the rules on council tax relief currently available for homes left empty because a person has moved into a hospital or care home, or has died, or has moved to provide care to another. These are special circumstances where there is a justification for a home temporarily lying empty. Moreover, councils will be encouraged to use their existing powers to apply discretionary discounts in cases where homes are empty due to other justifiable circumstances - for example, hardship, fire or flooding.

The consultation also proposes changes to modernise the council tax system and address potentially unfair future charges. These include:

  • More flexibility on payments. Give local residents a new right to pay their council tax bills in 12 monthly payments, rather than 10 instalments over a year. This will make it easier for local taxpayers to manage their payments, especially those on fixed incomes, like pensioners.
  • Encourage the take-up of electronic billing by reviewing the documents that have to be supplied in hard copy with council tax demand notices. Utility companies routinely offer discounts for customers who pay by e-billing and direct debit, but most councils do not. Local taxpayers would still have the right to request hard copy documents for free.
  • Stopping the "sun tax" on solar panels - ensuring there are no increases in the council tax liabilities of homes as a result of domestic scale photovoltaic solar panels being installed by a third party supplier under a 'rent a roof' scheme. These changes will avoid the imposition of a "sun tax" and the need for inspections of homes with solar panels.
  • Review the "double taxation" of self-contained annexes to family homes. Currently, council tax inspectors treat such annexes as a separate property, meaning families get charged twice for the same single property they occupy.

These practical improvements complement other reforms to council tax: confirming there will be no council tax revaluation which would have forced up bills for millions of homes; working with local councils to deliver a two-year council tax freeze; and giving local residents a new right to veto excessive council tax increases.

Eric Pickles, Secretary of State for Communities and Local Government, said:

"Council tax bills have more than doubled since 1997. This Government is taking action to keep council tax down, confirmed there will be no council tax revaluation and helped freeze council tax for two years. I want to do more to help everyday families with their cost of living. By treating everyone equally and fairly and removing the special tax breaks for empty homes and second homes, councils have the potential to cut £20 a year off families' council tax bills. Councils should make it easier to pay bills, and offer the same discounts for electronic billing that other companies offer as standard - this will cut paperwork and reduce tax bills."

Source: Department for Communities and Local Government

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