Leasehold Warning and Council Tax Exemptions
We’ve all seen the doom and gloom headlines about the cost-of-living crisis tightening the screws across the country, but there could be some positive news on the horizon!
It’s been a while since we’ve been able to share any good news, thanks to rising rent arrears, mortgage woes and the potential loss of Section 21.
A consultation has been opened to look into the possibility of not charging landlords council tax premium on an empty property.
A council tax premium is an extra amount of council tax that you are charged if your property has been empty for 2 years or more. The premium amount varies dependent on how long the property has been empty, but can be up to four times your normal council tax rate if it’s been empty for ten years. The premium is designed minimise the number of empty properties across the country and the government want to bring the current limit down from two years to one year.
However, it has been suggested that homes that are empty for long periods of time because of major structural or repair work should be exempt for up to six months. There could be a total exception of up to a year, if a landlord can prove this is due to large scale works and active marketing for rental.
The consultation says:
The government believes that where owners are using their best endeavours to bring a property back into productive use, then they should not be penalised through the imposition of the long-term empty homes premium.”
The consultation is due to end on 31st August, so we will be sure to update you with the outcome
Landlord Leasehold Warning
Flats, of course, are a regular investment for landlords, particularly in cities where they suit the lifestyles of young professionals. However, have you considered the impact a leasehold could have on your investment? If you are looking to sell in the future, having a leasehold property could make that tricky – as a recent poll revealed that 78% of agents said leasehold property would struggle to sell.
Agents cite increased consumer awareness, as well as lack of government action, for this struggle. Agents also say that the introduction of the Leasehold Reform (Ground Rent) Act 2022 hasn’t gone far enough – and so the issue remains unresolved. The Act effectively abolished ground rent for new leases of flats and houses in England and Wales – but most existing leaseholders are compelled to continue paying.
Head of Policy and Campaigns at Propertymark, Timothy Douglas said:
Policymakers must do more to create a level playing field with those who already own a leasehold property – make enfranchisement easier – simplify the process for lease extensions, and where there is no managing agent, freeholders must sign up to a redress scheme. A whole sector approach is needed to further protect consumers and bring about positive change for leaseholders.
As leases are a tricky subject, you can check out our show with Adrian McClinton to learn more about how they can affect your property, and your ability to sell in the future, so be sure to sign up for that if you have a leasehold property
