The London Borough of Camden has written to Eric Pickles urging him to allow them to increase the Empty Homes Premium to 100% from the current 50%. This is in line with representations made by the Empty Homes Network during the consultation exercise and - although Camden does not mention it in its letter - the current position in Scotland where Empty Homes Premium has been set at 100% from the outset.
Camden is also asking to reduce the period of time during which a property should remain empty before the Premium is payable to 1 year (from the current 2 years) and is seeking to remove the anomaly whereby putting some furniture into an empty home allows it to be treated as a second home.
Buy-to-Leave
The letter has been written in the context of considerable press interest in the phenomenon of "buy to leave" by foreign investors who are reported to be parking their money in a buoyant London property market but with little intention to live in the homes they have bought. They seem to be sufficiently aware of council tax rules to put a few sticks of furniture in them so they are treated as second homes.
It may be that the owners do occasionally visit the properties - it is difficult to know how the true position could be established. Certainly this story in London's Evening Standard was hotly denied.
Based on the experience of the last few years, playing "buy-to-leave" with British flats in the hope of capital appreciation would seem a pretty risky game. For every few percentage points of increased value in pounds sterling there are a few percentage points lost as the pound depreciates against other currencies.
So it seems equally likely that many of the rapidly growing number of mulit-millionaires around the globe may have bought flats because they genuinely weclome the opportunity to purchase a bolt-hole in what is still regarded in many quarters as the finest city in the world.
Treatment of Second Homes
From the Empty Homes Network perspective it does not matter whether the homes are "really" second homes or simply "empty homes with a few sticks of furniture in them".
Our policy suggestion is to simplify the tax system and reduce tax avoidance by treating second homes and empty homes exactly the same, so that unless a dwelling is somebody's principal residence it will be taxed in the same way regardless of whether or not it contains furniture. The Empty Homes Premium would then also become payable after two years. Our proposal effectively treats a second home as a luxury on which it is reasonable to levy a higher rate of taxation given the current scarcity of homes. With current council tax levels in London at less than 0.5% of the value of most properties, this is scarcely onerous.