Purpose

A decision is required to align Council Tax discounts and premiums across the new authorities, including arrangements for second homes, empty homes, uninhabitable properties, care leavers, and SR1 (terminally ill) cases.

Decision

RESOLVED

That     (i)     a harmonised approach be adopted to Council Tax Premiums across all constituent authorities;

            (ii)    a 100% premium be applied on second homes, from the earliest lawful implementation date, by giving notice in February 2027 to come into effect from 1 April 2028 in those areas where the premium does not currently apply;

            (iii)    long-term empty property premiums be applied at the maximum levels permitted by legislation for properties which are empty and unfurnished:

a)     100% premium for properties empty for one to five years;

b)     200% premium for properties empty for five to ten years; and

c)     300% premium for properties empty for more than ten years.

            (iv)   all mandatory statutory exemptions be maintained and the use of discretionary reliefs be reviewed to ensure consistency across West Surrey Council;

            (v)    a formal consultation be undertaken on the proposed harmonisation of Council Tax Premium policies across West Surrey, with the outcomes of that consultation to inform the development of a consistent policy for residents;

            (vi)   further work be undertaken to refine and complete the proposed policy, including consideration of the outcomes of consultation, financial modelling, equality impact assessments and implementation; and

            (vii)   a final harmonised Council Tax Premiums policy be brought back to Full Council in December 2026 for consideration and approval, with a view to implementation from Vesting Day.

Reasons for recommendation:

The Levelling-up and Regeneration Act 2023 introduced enhanced powers for English local authorities to apply Council Tax Premiums to long-term empty homes and, from April 2025, second homes.  Councils may determine whether to apply these premiums and at what level, subject to statutory maximums.  Government guidance emphasises that authorities should consider local housing pressures and local circumstances when exercising these powers.

Across Surrey, housing affordability remains a significant challenge, with strong demand for housing and limited supply in many communities.  At the same time, many dwellings remain either vacant for extended periods or are used as second homes rather than as primary residences.

Consistency and Fairness - A harmonised approach would ensure that residents across West Surrey are treated consistently, reducing confusion and perceptions of inequity between neighbouring areas that become part of the same local authority from vesting day.  Differences in premium levels can create administrative complexity and inconsistent outcomes for property owners.

Supporting Housing Supply - Council Tax Premiums are intended to encourage owners to bring properties back into occupation and to make more effective use of existing housing stock. Government guidance specifically identifies the use of premiums as a tool to support local housing objectives and address housing pressures.

Administrative Efficiency - A common framework would simplify administration, communications, enforcement, and customer service arrangements.  Shared policies would also facilitate collaboration across West Surrey and support consistent decision-making.

Financial Sustainability - Additional revenue generated through premiums can contribute towards the cost of local services and support housing-related initiatives.  While revenue generation should not be the primary objective, a harmonised approach would provide greater certainty in forecasting and budgeting.

Proposed Harmonised Framework - The framework would operate alongside all statutory exemptions and exceptions prescribed by government regulations.  The exceptions are prescribed by central government, where in certain instances the premiums cannot be applied.  Authorities would continue to exercise any discretionary powers in accordance with agreed West Surrey policies.

Benefits - The proposed approach is expected to:

·             Encourage occupation of underused housing stock.

·             Support housing availability for local residents.

·             Deliver greater consistency across West Surrey.

·             Reduce administrative complexity.

·             Provide additional resources to support housing and community priorities.

·             Strengthen public understanding of Council Tax Premium policies.