Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill: Briefing for Lords Stages

The Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill is a government bill which seeks to retrospectively ‘reinstate’ particular features of business rates valuation practice (in relation to ‘contiguous’ properties) and would allow local authorities to charge up to a 100 percent council tax premium for ‘long-term empty dwellings’. The Bill was introduced in the House of Commons on 28 March 2018 and completed report and third reading on 15 May 2018.  It is due to receive second reading in the House of Lords on 4 June 2018.

The Bill contains three clauses. Clause 1 seeks to ‘reinstate’ the business rates valuation practices that were in use prior to changes brought about by the Supreme Court in Woolway (VO) v Mazars [2015] UKSC 53, so that separate hereditaments occupied by the same individual/business which are ‘contiguous’ (for example, which share a wall or floor/ceiling) are treated as one for valuation purposes. The case had resulted in some businesses facing increased charges. Clause 2 would double the council tax premium which local authorities could charge on ‘empty homes’ from 50 percent to 100 percent (in effect, allowing a maximum council tax charge of 200 percent). Among other matters, clause 3 states the Bill would extend to England and Wales only (although, in effect, the explanatory notes state it would only apply to England).

The Bill received cross-party support during its passage through the House of Commons, and no amendments were tabled to the Bill at public bill committee or report stage. However, concerns were raised over the potential impact on local authority finances of the backdated changes to business rates valuation practice, and some suggested a higher rate of council tax should be charged on empty homes.