New council tax help for hard-working families and pensioners

Following a consultation, the Coalition Government is today confirming plans to amend council tax rules so elected local councils have greater local flexibility to help residents through fairer approaches to tax billing, second homes, empty homes and solar panels. Further steps will also be taken to support family annexes to help elderly relatives and extended families.

These reforms could allow councils to make up to a £20 reduction in the bill for a typical Band D property in England, or hold bills down by the same amount.

The Government will amend council tax laws to:

Make bills easier to pay by giving local residents a new legal right to choose to pay their council tax bills in 12 monthly payments, rather than the fixed 10 in the course of a year. This will help those on fixed incomes, like pensioners.
Promote the take-up of voluntary electronic billing, by removing regulatory obstacles. The Government is keen to promote e-billing and direct debits, delivering savings for councils which could be passed onto local taxpayers. Residents will retain the right to hard copy documents, if they wish.
Give councils greater local flexibility to choose to waive special tax relief on second homes and empty homes, allowing councils to use the monies to keep the overall rate of council tax down. This would allow a £20 saving on a Band D council tax bill for ordinary families. There will be no requirement for councils to make any changes, if they do not wish.
There will be no changes to homes which are empty due to the death of the owner or if the resident is away in care or hospital. Nor will there be any changes to the ‘job-related’ second homes discount. The Government has already provided 100 per cent council tax relief to Armed Forces personnel on operational duties abroad for six months.
Reforms will also allow councils to tackle long-term empty homes (empty for more than two years), through an empty homes premium. This is since empty homes can attract squatters and vandalism, blighting communities and harming local amenity of nearby resident families.
Prevent a ‘sun tax’ supplement on bills for homes with solar panels or the need for intrusive inspections where panels are installed by a third party under the rent a roof scheme.  Domestic scale solar panels will continue to be treated as part of the home.

Mr Pickles also announced that his department is to undertake further work into supporting family annexes. Ministers are keen to remove tax and other regulatory obstacles to families having a live-in annex for immediate relatives – such as teenagers or their elderly grandparents. Such reforms will help increase housing supply and help ensure the elderly have dignity and security in retirement.

Eric Pickles, Secretary of State for Communities and Local Government, said:

"Since 1997 council tax bills have more than doubled. The Coalition Government’s council tax freeze has cut council tax in real terms over the last two years.

"These further common sense reforms will help families and pensioners with their cost of living, keeping bills down and making bills easier to pay.

"This Government is on the side of ordinary families, who work hard and do the right thing."

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