Why taxing empty properties does not work!


One argument used to encourage the use of empty properties is to increase council tax rates. But as the following extract shows this does not always work!

There is something odd about Kensington and Chelsea. Across England, the number of homes left empty for six months or more fell by more than a third between 2006 and 2016, and in London it was down by a half, but in the west London borough it increased.

Rising house prices and rents, combined with changes to council tax rules, have made it unappealing for most people to keep a property empty. But even the prospect of collecting £10,000 a month from a tenant is not enough to encourage some of the country’s richest owners of empty homes to let people in.

In the face of such wealth, attempts to penalise owners of unoccupied properties lack teeth. Since April 2013, councils in England have been allowed to charge a premium of up to 50% on council tax after properties have been left empty for two or more years.
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In Kensington and Chelsea it means the owner of a band H property – any home that was worth more than £320,000 in 1991 – would face a surcharge of just over £1,000 this year. Since April, councils in Wales have been allowed to levy a 100% surcharge, but a doubling of the bill is unlikely to move a millionaire to action.

https://www.theguardian.com/society/2017/aug/01/empty-homes-normal-rules-do-not-apply-to-super-rich-in-london

Of course to get around any extra charges we imagine that wealthy owners would stay there for a while or of course they could let them out to other wealthy individuals as holiday accommodation. So its pretty well impossible to use the tax system to stop homes from being left empty or not used for residential purposes.

Far better to bring in strict rules on who can purchase properties and for what purpose! But that would interfere with the free movement of capital and we cannot have that!

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