The Mayor of London, Sadiq Khan, has called on the Government to allow London’s boroughs to increase Council Tax bills for high-value homes that are left empty.
The Mayor commissioned a report last year and this appears to be the response to that report. Specifically, the report looked into the contribution of overseas investment to new housing supply, as well as public concerns over homes being sold to overseas buyers and kept empty.
In its findings, the research found the number of entirely empty homes to be quite low, but suggested there were greater numbers of empty homes in prime and expensive locations.
In response to the findings the Mayor has asked the Government to permit boroughs to boost the empty home Council Tax levy on high-value properties above the current 50 per cent of Council Tax allowed.
The request to the Government asks that boroughs should be permitted to charge a levy at a meaningful rate to incentivise occupation, or at the very least generate a more substantial receipt that could support investment in new affordable homes and other measures to tackle the housing crisis. In defending his position, the Mayor refers to the case of Westminster’s top Band H, where properties may be worth many millions of pounds but the empty homes levy would currently be no more than £688 a year.
The Leader of Westminster Council, Councillor Nickie Aiken is supporting this proposal and said: “Not only is it an important message to send out, it would also generate additional funds to be invested in our areas for the benefit of local residents. Along with the Mayor I have made it my priority to ensure that we have genuinely affordable housing in the heart of the capital.”
This may push more property on to the market but the number of empty properties remains low in comparison with the number needed. As many of the properties concerned are at the upper end of the market the impact of these properties being put on the market may be minimal for the majority of those seeking a place to live. Some wealthy owners may also simply pay the higher tax and continue to leave the property vacant. Many more measures will be needed no doubt so further steps are expected.