This week I wrote to the Local Government minister, Eric Pickles MP, requesting that councils be given the option to end council tax discounts for second homes. At the moment councils can choose the level of discount for second home owners, but only down to a minimum 10% discount. Even this 10% costs Brighton & Hove City Council £177k a year in lost revenue. I believe we certainly shouldn’t be encouraging second home ownership with tax discounts, particularly when so many struggle to find affordable main homes.
Ideally there should be complete local control over land taxation (which is effectively what council tax is) but failing that we should at least be given discretion over the discounts. Tories claim to believe in localism and that they are devolving power and autonomy down to councils. Yet they are imposing massive, unnecessary reductions on our budgets whilst failing to give us any meaningful new powers or freedoms in relation to how we generate income. Ending the nationally imposed 10% minimum discount would be a small step in the right direction.
You can read the formal press release and the full letter is copied below.
Cllr Jason Kitcat
Brighton & Hove City Council
Kings House, Grand Avenue
Hove BN3 2LS
The Rt Hon Eric Pickles MP
Secretary of State for Communities & Local Government
Department for Communities and Local Government
Eland House, Bressenden Place
28th September 2011
Dear Mr Pickles
SECOND HOME COUNCIL TAX DISCOUNTS
I am writing to ask that you give councils the opportunity to opt out of providing second home council tax discounts if they so wish.
As you will know councils face challenging financial times due to your government’s imposed budget reductions, demographic pressures and inflation, particularly on energy costs. Furthermore given the desperate shortage of affordable homes, we believe some councils including Brighton & Hove City Council would, given the powers, opt to eliminate second home council tax discounts. This would signal our desire to discourage second homes being maintained, and rather that they should be available for people use as their main homes.
In Brighton & Hove it currently costs the council £177,000 in lost revenue each year to provide the second home discount (see below for breakdown of this figure). We believe these funds should be used to protect existing services rather than subsidise reduced costs for second-home owners.
I know you passionately believe in localism so ask that you give local authorities the discretion on whether to offer a second home discount on council tax.
I look forward to your response.
Cllr Jason Kitcat
Cabinet Member for Finance & Central Services
Breakdown of lost revenue from second home council tax discounts in Brighton & Hove (2011/12)
Band A B C D E F G H Total number of discounts 191 228 269 213 198 68 49 7 1223 CT payable £988 £1,153 £1,318 £1,482 £1,812 £2,141 £2,471 £2,965 10% x number of discounts £18,877 £26,289 £35,448 £31,577 £35,876 £14,561 £12,107 £2,075 £176,810