Council Tax Changes May Lead To Landlords Being Out Of Pocket

03 October 2012 Categories: News

Council Tax Changes May Lead To Landlords Being Out Of Pocket

Birmingham City Council announced this week that as of April 2013 they plan to end council tax exemptions on empty properties and properties undergoing structural work – a move that could lead to thousands of landlords facing a full council tax bill for every property they own. At present the council allows a 6 month tax free period for untenanted properties and a 12 month exemption for properties undergoing building renovations, but the new plans would mean even uninhabitable properties would incur a council tax bill.

The plans have come as a result of changes in the way council tax benefits are paid to local authorities by the government. As of April next year, local authorities will be paid council tax support rather than council tax benefit, and in the case of Birmingham City Council the changes mean they will now face a funding deficit of nearly £11m each year.

In a separate proposal,Birminghamcouncil also wants to impose a 150% council tax rate on properties that stand empty for more than two years, however this plan is still at the consultation phase.

It is thought that other local authorities will also start revoking the current council tax exemptions on empty properties so that the ‘neediest’ claimants e.g. pensioners and those on benefits, will not become affected.