TVBC ends tax breaks for second homes

First published in News

Second-home owners will have to pay the full rate of council tax in the Test Valley from the beginning of the next financial year.

The abolition of the 10 per cent council tax discount was agreed at a meeting of full council last week.

Extra revenue earned will help fund the new local council tax support, which will replace council tax benefit, when it is discontinued later this year.

However, overall funding from the Government for the local schemes is around 12 per cent less than previously allocated for council tax benefit.

In line with recommendations from cabinet in November 2012 and feedback from the public, the council agreed not to make any changes to council tax benefit for the financial year 2013/14, to protect those on the lowest incomes. The scheme will be reviewed during the course of the year before a decision is taken on plans for future years.

To make up the funding shortfall, the following changes to discounts and exemptions on second and empty homes in Test Valley will be implemented from April: * Abolish the current 10 per cent council tax discount for second homes.

* Reduce the current 100 per cent exemption period for vacant properties from six months to three months, after which the full rate of council tax is payable.

* Abolish the current 50 per cent council tax discount for vacant properties that applies after the current six month 100 per cent exemption period - as well as after certain other exemptions - so that the full rate of council tax is payable *Introduce a premium council tax payment of an additional 50 per cent on top of the full rate, for properties that are vacant for two years or more.

Peter Giddings, economic portfolio holder, said: “To make up the funding shortfall, we had to make some difficult decisions around discounts and exemptions on second and empty homes.

“However, it is hoped that these changes will help increase the number of properties on the market for sale or rent in Test Valley and improve residents’ access to a decent home.

“The coming year will enable us to see how the changes are working, as we consider whether any amendments to the scheme are required in future.”

Late last year, the Government announced that local authorities whose chosen schemes help protect the poorest, will receive a share of a £100 million transitional grant. The allocation for TVBC is just over £12,000.

TVBC say the net cost of delivering the local council tax support scheme will be around £20,000. The council will fund this from its New Homes Bonus reserve for 2013/14. This fund is created by the Government matching the council tax income for six years from new homes created in the borough.

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