Council Tax rule C abolished on empty unfurnished properties

[Mortitia]

I have just been informed one local authority that I deal with that relief from council tax under clause C when an unfurnished property is vacant will end in April next year.

Councils will have discretion to offer a discount to landlords who have empty, unfurnished properties - but don't hold your breath expecting one

Discuss

Mortitia.

[Melboy]

This has been on the cards for some while now.

Very annoying as it is just another revenue raising scheme and my argument would always be if you are not using any Council services how can you be charged for using them?

Any council tax paid is tax deductable though on your HMRC return.

[kerbut]

We are thinking of downsizing in a couple of years time and renting what is now our home out, we would move to one of our flats which is at present tenanted , if the tenant moves out before we are ready to move I intend leaving the flat empty and potter around getting it ready for when we are ready to move. As I understand it you are exempt from council tax if the property has no bathroom or kitchen fitted (both of which I intend to change ), would the new ruling from next April change the above ?

Edit: I would take the kitchen and bathroom fittings out as soon as the tenant leaves and fit new a couple of weeks before we move in.

[Melboy]

From my experience changing a bathroom and kitchen does not exempt you from paying council tax. It is regarded as "cosmetic" alterations believe it or not.

Major alterations do exempt you one of which is re-wiring, flooding, re-roofing etc. but as always it is down to the Local Council's rulings.

[Richlist]

I have a number of points:

1. The country is in deep s**t financially so we all have to do our bit......and I don't begrudge helping out.

2. This change will help us all to focus on keeping voids to a minimum......keeping property in tip top condition and ensuring rents are competitive should also help.

3. This situation already exists for furnished property in my part of Essex.......we have always had to pay 90% c/ tax when unoccupied.......so we are familiar with the situation.

4. Council tax payments are tax deductable so in reality we will only pay either 60% or 80% of the full amount.....depending on your tax band.

5. Tenants should wise up to the situation and use it as a negotiating tool when discussing rents (&/or rent increases).......

[Carryon Regardless]

Scenario,

T absconds, L may be unaware for some time.

L may prefer to take the legal route to ensure correct repossession, rather than risk an illegal eviction claim.

Property requires significant works to make habitable again.

G'tors and insurances often have limited value for such scenarios.

All this is far from uncommon to many LL's.

The 'investment' will already have become a drain on finances and yet local councils will now be able to squeeze the businessman harder, for what I see as unjustified (point well made by Mel).

At a time when as you say RL the Country is strapped for cash, is it intelligent to put more pressure on this business sector ?. Weigh up the additional legislative burdens that have come our way in the last few years and you might believe, as I, that this new load of straw will break a few backs.

An example of straw.

Hyndburn BC, at their 2nd attempt, are introducing selective licencing to many of their areas. Pay up £775 by 1st December for the application (5 years worth) or suffer up to £20k fines and your last 12 months rents reclaimed by HB or T.

Within 12 months electrical compliance must be demonstrated. Over a 5 year period the BC aims to visit all properties to raise a list of remedial works required, Guarenteed this will be regardless of who caused the need for works.

Properties here have nose dived in value. In 2005 I bought one that I considered to be an excellent price then, £46,000. As most it rose, to around £75k+, a few months ago one comparable (although likely to be less attractive) sold at auction for £22k.

For many there is very little incentive to continuing with the rental business. More straw, less LL's more responsibility returning to the Gov't for housing.

[Richlist]

Well, I don't think many would argue that you have a very cynical view of residential lettings. Its certainlly not one that I would share and in fact many of my experences are completely the opposite of yours.

G'tors and insurances often have limited value for such scenarios.

All this is far from uncommon to many LL's.

Not to me it isn't. I find insurance .....in particular rent guarantee insurance......very useful.

I know of at least one landlord who no longer takes deposits at all, instead, preferring to have a home owning guarantor that covers UNLIMITED financial claims and in his opinion therefore warrants deposit protection as a complete waste of time.

The 'investment' will already have become a drain on finances and yet local councils will now be able to squeeze the businessman harder, for what I see as unjustified (point well made by Mel).

If your investment isn't producing a satisfactory return then its a bad investment. Get out now. Put your money into something else.

At a time when as you say RL the Country is strapped for cash. is it intelligent to put more pressure on this business sector ?

Yes I believe it is.

Landlords need to factor into their business plan all the costs.

The system works perfectly for me.

[Carryon Regardless]

As has been recognised before RL the world you operate in is very different to that of many others.

In areas where T's are unlikely to be in work and claiming HB more often so are those that would be their G'tor, in effect useless in the event.

That then leaves the RGI not an available option.

Having been in court in the hope that the G'tor would be held to account as contracted, as stated in the deed, I now have no confidence of that route.

Attempting to be selective and hold out for a better class of T is due to become more expensive. That's not much of a good business plan either way.

A satisfactory return, well how long is that string ? Some are happy with break even, others have higher ambition. But you missed the point of the negative equity in my example. To sell I would need to top up to clear the mortgage, moving my cash to something else isn't an option - or trust me I would. In fact to break even on the sale, that is sell for enough to clear the mortgage(s) would make me happy.

For a long time (due to my cynicism) I have believed that we are fast becoming agents for local council housing. Responsibilities of T's are laughable, while we act as middle man for the deposit, and wait for a housing inspector to tell us the standard to house to. If your T loses employment, as many do, you've a problem if he's less than 35.

When I factored in the costs, way back when, it couldn't be foreseen that council tax might become such a significant cost. What percentage do you factor in for the unforeseen?

Also back then, not that HB is preferred often just the only option, I couldn't factor in only taking the limited availability of over 35's.

The legislation goal posts are always going to move, it's to be expected, some call it progress. Can you name any new bright ideas from London that have worked in the LL's favour ?

It makes me happy that your happy with the perfect system.

[Richlist]

OK point taken. I accept your situation is different to mine.

Can you name any new bright ideas from London that have worked in the LL's favour ?

I find rent increases are one way of funding the unexpected provided you ensure they remain broadly competitive. I'm just in the process of issuing X8 section 13 notices raising rents by an average of 5%.

I also believe that many landlords fail to maximise the potential from their tax returns. Many people just don't claim what they are entitled to claim and therefore pay far to much income tax.

[Richlist]

I also believe that many landlords fail to maximise the potential from their tax returns. Many people just don't claim what they are entitled to claim and therefore pay far to much income tax.

......and given what we have learned this week from the Select Commitee interviews of Ebay, Amazon & Costa Coffee.......it seems we all have a lot to learn about avoiding paying our income taxes.

[julles]

Just to let you know Kerbut the unoccupied and unfurnished excemption is one form of excemtption , and then there is another type which is

empty because it is unhabitable, I am not sure what excemption letter they give that but having no kitchen and/or bathroom is considered to be unhabitable.

would just depend on whether councils would need to know if it is intentionally unhabitable.

[Melboy]

Just to let you know Kerbut the unoccupied and unfurnished excemption is one form of excemtption , and then there is another type which is

empty because it is unhabitable, I am not sure what excemption letter they give that but having no kitchen and/or bathroom is considered to be unhabitable.

would just depend on whether councils would need to know if it is intentionally unhabitable.

It's not Julles.......if a kitchen or bathroom is removed and to be replaced then the Council inspection officer may give you a time for installation and that time is normally around 4 weeks and also some councils will not give you any time whatsoever and you will be liable for council tax payment.

Been there and done it.

Nearly all Councils now adhere to the rule of MAJOR WORKS and bathrooms and kitchens do not fall into this catagory.

Some councils are still giving you 6 months but for most this will end next April or at best reduced to 3 months or even 1 month.

[kerbut]

Thank you Julles and Melboy

[julles]

Oh , thanks for the correction melboy ...I was not aware that was the case now

and as for the change next year , will have to make sure I have no more voids .

[Guest missionrestoration]

Thanks for the information and please keep updating us.

[Antnkel]

What if you buy a property that needs totally refurbishing and is uninhabitable from the start, would there be an excemption for this?