The House of Commons Library has published a briefing on the new Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill 2017-19, a Government Bill, which implements two separate policy commitments made in the 2017 Autumn Budget and which has now had its second reading.

Reversing the effects of the ‘staircase tax’

As previously reported, the ‘staircase tax’ is a colloquial term given to the effects of the case of Woolway vs Mazars, on which judgment was given in July 2015. This case affected the valuation of properties for business rates purposes. The effect was that properties that were contiguous, but where access from one to the other was through a communal area, were required to be treated as separate and could not be valued as a single property. The Government issued a consultation, and a draft Bill, on 29 December 2017, with a response published on 3 April 2018.

Speaking in the Second Reading debate, Minister for Housing Dominic Raab highlighted that clause 1 of the Bill would restore the previous practice of the Valuation Office Agency. This would see adjoining properties belonging to the same business receiving one rating assessment and paying a single rates bill. Parliamentary Under-Secretary of State for Housing, Communities and Local Government Rishi Sunak also agreed that the Bill would provide fairness for businesses facing a significant tax hike and reiterated that the policy could be backdated where necessary.

Increasing the maximum ‘empty homes premium’

Clause 2 of the legislation would allow councils the flexibility to permit a charge of up to 200% of normal council tax on properties that have been empty for two years or more, instead of the current limit of 150%. Mr Sunak has also clarified that, in addition to exemptions for those in care or in the armed forces, discretionary discounts would be available for houses that were empty because of special circumstances such as fire or flooding.

The Bill will now be debated in Committee, which will meet for the first time on 1 May 2018 and has published a call for written evidence. It will stop receiving written evidence at the end of the Committee stage, which is expected to be not later than 5pm on Thursday 3 May 2018.

The Bill extends to England and Wales and applies to England only.

For more information on Business Rates and Council Tax, click here.