A VAT incentive should be introduced to encourage property
owners to bring empty homes back into use, said the Halifax,
which believes the estimated 300,000 long term empty
properties in England must be reduced in number. In the
meantime, all 300,000 of the properties are now susceptible
to being taken over by local authorities under recently
acquired powers, Halifax warned.
The 300,000 total, which has fallen by 6 per cent in
the past three years, equates to 1.6 per cent of the
housing stock. In 21 local authorities at least 3.0 per
cent of the private dwelling stock is empty, said the
Halifax.
The highest number of private empty homes is in Burnley
(6.2 per cent), Liverpool (5.6 per cent) and Pendle (5.1
per cent). Nine of the top 21 empty homes areas are located
in the north west, while three are in the west midlands.
In
Birmingham, Liverpool and Leeds were among 10 local
authorities with more than 3,000 empty private homes
in 2005.
Property prices were lower in areas with a higher than
average incidence of empty homes; the average discount
being 16 per cent lower than the regional average.
Halifax called on the Government to extend to all empty
properties the reduced 5 per cent VAT rate on the cost
of renovation. Currently the cost of restoring an empty
home attracts the full rate of VAT (17.5 per cent) unless
the property has been vacant for more than three years
when the 5 per cent rate. A property vacant more than
10 years, which is renovated and sold, attracts a zero
rate of VAT. New build properties are not liable for
VAT on construction costs.
Halifax
puts the average cost of restoring an empty home at £28,788. On this basis the average VAT
payment for restoring an empty home vacant less than
three years would be £5,038, while restoring an
empty home vacant for more than three years would attract
an average VAT payment of £1,439.
At
300,000 the number of private homes in England left
vacant for more than six months ‘clearly needs
to be brought down’, said Halifax group economist
Tim Crawford. ‘Restoring an empty home is likely
to be expensive, potentially costing close to £30,000
by our estimates. We encourage the Government to broaden
the incentives available for restoring empty homes and
extend the reduced 5 per cent rate of VAT for renovating
an empty home to all properties vacant for more than
six months, not just properties vacant for more than
three years’.
• Basingstoke
and Deane Borough Council is urging people who own
empty homes to come forward to help increase
the amount of affordable housing in the borough.
As
part of National Empty Homes Week, the council has
identified that there are an estimated 645 empty properties
in the borough which have been empty for over six months.
It said there are two main ways it can help
owners of empty properties. One is by working with Downland
Housing Association on a private landlord scheme, the
other is by way of grants to help with the cost of renovating
empty homes. The council can also pass on details of
anyone looking to buy an empty property to renovate to
owners.
• Rossendale Borough Council is to levy the
full council tax on empty homes rather than the 50 per cent it currently
collects. ‘Removal of this exemption will encourage
more property owners to bring their properties back
into everyday use’, said Council leader Duncan
Ruddick.
