§ Mr. KidneyTo ask the Deputy Prime Minister what the maximum council tax is that a local authority may set for(a) a second home and (b) an empty home; and to what purposes the local authority may apply the proceeds of the council tax received in each case. [162220]
§ Mr. RaynsfordFrom 1 April 2004, the Council Tax (Prescribed Classes of Dwellings)(England) Regulations 2003 (SI 2003/3011) allow local billing authorities to reduce the discount on most second homes to 10 per cent. and on long-term empty homes to zero. There is a national exemption from council tax for unfurnished dwellings which are vacant for six months or less. The maximum council tax which could be charged on a second home is therefore 90 per cent. and the maximum council tax which could be charged on a long-term empty home is 100 per cent. Council tax from second homes and empty homes can be used in the same way as council tax from other property. The proceeds are shared, between billing and precepting authorities. The effect of changing the discounts on second and long-term empty homes is to raise the tax base of an area and so local authorities in that area can raise more council tax. The Government will not adjust grant because of the extra income generated by reducing the second homes discount. This means local authorities in the area have the choice to spend this on local priorities or to have a lower council tax or precept than would908W otherwise have been the case. In the case of long-term empty property, the Government intend to adjust grant so that extra revenue will not be retained locally.