§ Mr. Clifton-BrownTo ask the Deputy Prime Minister what the maximum amount is that the abolition of 50 per cent, discount council tax on(a) second and (b) empty homes will raise; what proportion (i) billing and (ii) precepting authorities will be able to retain; how a distinction between empty and abandoned homes will be made; and what the estimated compliance costs are of these changes. [844141]
§ Mr. McNultyMy right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) announced on 19 November 2002 that the Government intend to allow English local authorities discretion to reduce council tax discounts on second homes from 50 per cent. to a minimum of 10 per cent. The Office of the Deputy Prime Minister has decided not to remove the discount completely because owners need an incentive to inform the local authority that properties are second homes. Without such information, it would not be possible to identify the extra revenue which could be raised from changing the discount. The Office of the Deputy Prime Minister also announced that we intend to allow English local authorities to reduce or remove completely the current 50 per cent, council tax discounts on long-term empty dwellings. In either case, the billing authority may determine to change the discount in all or part of its area.
Authorities where the second homes discount has been reduced will benefit from any additional council tax raised: we do not propose to reduce their revenue support grant to take account of their greater tax raising ability. If all authorities reduced the second home discounts to 10 per cent., this could potentially raise around £65 million. If all authorities removed the empty home discounts completely, this could raise a further £160 million.
The benefit of the additional revenue resulting from a reduction in the second homes discount would be shared with the major precepting authorities. The proportions which would go to billing authorities and to major precepting authorities will vary from location to location, depending on the proportion of the council tax bill in an area which goes to major precepting authorities, and different authorities' decisions about how the discount should be applied. The compliance costs will depend on how individual billing authorities decide to change the discounts.
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