Empty home owners' council tax shock

Concessions on empty homes and second homes are being removed in England

A million home owners who do not live full time in their property could see their council tax rocket in April, as most automatic discounts are to end.

The change, which will affect second homes and empty properties in England, could see bills for 2013-14 rise by 200%.

Previously, such properties had benefited from a 50% discount.

The new rules give councils more freedom to raise money locally and bring empty homes into use.

Councils do not have to increase taxes on second homes and empty property. But the Institute of Revenues, Rating and Valuation (IRRV) says early evidence suggests most of them are doing so.

Speaking on Radio 4's Money Box programme IRRV chief executive David Magor said financial need was forcing them to take advantage of the new rules.

"The government is trying to get a greater yield from council tax to keep the overall level down. And it is trying to encourage the occupation of empty homes.

"But sitting behind this is the funding of the council tax reduction scheme. Councils have had to adopt these provisions to find the money to finance those schemes."

Current exemptions

Altogether they must find more than £400m to fund the reduction scheme for low-income families. And the 710,000 empty homes and 250,000 second homes are an easy target.

Empty properties without furniture are currently exempt for six months in England and then get a 50% discount. In future the council can decide to charge the full payment from the start.

Similar changes apply to vacant properties which are undergoing major repairs or alterations. An automatic 12-month exemption ends in April and many councils are charging the full amount.

Once a property has been empty for two years they can charge a premium of 50% on top of full council tax.

Katrina bought a property in Rotherham to renovate while she still lived with her mother. Her council tax will rise from just under £50 a month to almost £150 as a 50% reduction becomes a 50% premium.

"There is no law against taking a long time to get it renovated. If they'd told us a year ago maybe I could've pushed and got it finished. But I've been given less than a month's notice."

Rotherham Council said it had consulted on the changes in the autumn.

"We had to make these very big changes because by abolishing the previous national Council Tax Benefit scheme the government left Rotherham with a huge shortfall that was previously used to help those vulnerable and most in need across Rotherham."

Landlords too will find their costs go up. At the moment they get six months free of council tax between lettings of unfurnished property. But from April that will end.

Adrian Thompson, Director of the Guild of Residential Landlords rents many properties out in the North of England. He says rents will have to rise.

"I can see no choice in the matter, Returns are very low anyway. I can't see any choice."

And he says it does not help that councils are all making different decisions.

"Harrogate are giving one week instead of six months. But Sedgefield is three months. And Leeds 20 miles away is zero, not even a day. It's a nightmare. "

Communities Minister Baroness Hanham defended the changes. "Localisation will give local authorities the flexibility to design council tax support schemes for working age claimants in their area. Many are delivering savings using their local flexibilities and discretion"

Money Box is broadcast on Saturdays at 12:00 GMT on BBC Radio 4 and repeated on Sundays at 21:00 GMT.

You can listen again via the BBC iPlayer or by downloading Money Box podcast.