Should Sheffield charge landlords with empty properties double the amount of council tax?

Sheffield should halve the length of time after which owners of empty properties are liable to pay twice as much council tax, and use the proceeds to give the city's least well-off residents a discount on the charge.

That's an idea being put forward by a group of community campaigners who say the move would incentivise landlords to fill vacant properties and would help address a dire housing shortage in the city.

At the moment, landlords who own homes in the city have to pay a 100% premium on their council tax if the property remains empty for more than two years.

Launching their Fairer Council Tax campaign in the city centre last night, community union ACORN say they want Sheffield City Council to use new powers in the Levelling-up and Regeneration Act to bring the cut-off point forward to twelve months.

Cost-of-living crisis

The move would follow in the footsteps of Manchester City Council, who voted yesterday to use the new powers to bring the length of time at which owners of unfurnished properties are liable for double council tax down to one year, starting this April.

Manchester councillors also decided that owners of empty properties classed as 'furnished' should have to pay twice as much council tax as soon as the property becomes empty. This change will only come into effect in April 2025 – the earliest date allowed by the legislation.

In Sheffield, ACORN say they want the council to use the proceeds from the rule change – which they estimate would be around £1 million in additional revenue every year – to offer people earning less than £15,000 a year an exemption from council tax entirely.

"With the cost-of-living crisis that we have, that extra £150 can be the difference between people being homeless or not," said Sheffield-born renter and ACORN member Jack, who spoke to Now Then at the launch of the campaign.

"It's a massive proportion of the money that I'm getting in every month. I know it doesn't necessarily seem like a lot, but it's the difference between me being able to go out of the house and not being able to."

An unfair tax

Council tax is regressive, meaning that the poorest people in society pay a higher proportion of their income towards it than the richest. The IPPR think-tank have called it "unfair", after finding that "the burden of council tax on London’s poorest households is more than six times greater (8.1 per cent) than on those in the highest decile (just over 1.3 per cent)."

Councils in England don't have the power to scrap or significantly alter the tax, but they can choose to offer discounts of up to 100% to their least well-off residents, as Bristol City Council have chosen to do.

Alexi Dimond, a Green councillor in Gleadless Valley and an ACORN member who attended the campaign launch, said that he was "really pleased" to hear that councils now have the power to increase council tax on empty properties sooner.

"I think due to the housing crisis and the fact that we have so many people facing homelessness in Sheffield, it's fair that people who keep properties empty should be charged double council tax for them sooner," he told Now Then.

Bizarrely, the amount of council tax you pay in England is usually still based on valuations that were carried out when the tax was introduced in 1991. This means that some property owners, especially in the south-east, have seen the amount of council tax they pay increase only slightly while the actual value of their property has soared.

A broken system

Cllr Dimond called for changes to council tax so that the amount you pay is based on the current value of the property rather than historic valuations, but said this was just one of the reforms needed to fix Britain's housing sector.

"There's so many other things that we need to do to reform the housing system," he said. "We need rent caps so that rent is genuinely affordable and so that private landlords can't keep putting up the rent exponentially."

"We need to be able to have landlord licensing in every city to create a register of good landlords, and we need progressive taxation and wealth taxes. But this [proposal by ACORN] is within the council's power, so we should absolutely be doing it."

Government figures show that there were 2,644 homes in Sheffield that had been empty for at least six months as of October last year. At the same time, more than 4,000 people or families applied to Sheffield City Council to be registered as homeless in 2022.

Cllr Douglas Johnson, Chair of the Housing Committee, told Now Then that Sheffield City Council try to re-let vacant properties "as quickly as possible" so that they don't stand empty.

"We have a shortage of affordable housing in the city, so we want to bring as many empty private sector homes as possible back into use," he said. "We have a small but dedicated team identifying empty properties and liaising with the owners to try and get them reoccupied."

"The council already charges increased council tax on properties that have been empty for more than two years – which increases after five years and again after ten years. This is to encourage owners to have their properties occupied."

"Where the law allows us to increase these incentives, the council will look at using any new powers."