Suffolk: Councils to scrap tax breaks in bid save cash
THE council tax discount given to more than 5,000 second home owners in Suffolk could be axed – after every district and borough in the county confirmed it is reviewing the policy, the EADT can reveal.
Such a move, which has been opened up to cash-strapped local councils by new legislation, would bring thousands of extra pounds back into their coffers.
And that could be particularly good news for the likes of Suffolk Coastal District Council, which has more than 2,500 properties classes as second homes.
The region’s 5,656 second home owners could see their 10% council tax discount scrapped when the Government hands over control of council tax benefits to local authorities from April 2013, as part of widespread welfare reform and cuts to central Government funding.
Unoccupied properties across the county could also be no longer eligible for a council tax discount, in an attempt to bring homes properties back into use.
Options also include reducing the amount of support paid to all working age claimants and increasing tax for Second Adult Rebate recipients.
Each borough and district council is asking its residents to respond to a 12-week consultation on the possible changes, which exclude anyone receiving a pension and must then be decided on by the end of the year.
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In Suffolk Coastal the proposals are the same as those across the rest of the county and include reducing support to people of working age currently receiving council tax benefits, removing discounts available to owners of second homes and empty homes, and ending the second adult rebate paid to those sharing a house with someone with a low income.
Almost 5% of properties in the district are second homes, including 63 of 175 homes (36%) in Bawdsey, 107 of 315 homes (34%) in Walberswick, and 26 of 82 homes (31.7%) in Dunwich. Scrapping the 10% discount could bring in an estimated �390,000
Meanwhile, unoccupied homes currently receive a 100% discount for up to six months, while homes in need of major repair or structural work receive the discount for up to a year.
Leader, Ray Herring, said: “The Government has always set the rules for council tax benefits, and fully met its cost, but from April 2013 all the responsibility will be transferred to local councils, but with only a maximum of 90% of its current funding.
“This means that we can now make local decisions about how we operate the new council tax support scheme and our immediate goal is to fill the large funding gap of over �700,000 in our district alone.
“We think that is only fair with these tough financial times that we end the 10% discount for the owners of second homes and reduce or remove the 100% discount for empty homes. We also intend to make those of working age who currently receive council tax benefits pay a small part of their bill, whether they have a job or not.”
In Waveney, a number of different options had been considered but rejected, including increasing council tax for everyone and using other council money to make up the shortfall. The council could make up around �170,000 by dropping the discount on its 1,400 second homes. Council leader, Colin Law, said: “We would rather not have to follow this path but we have been given no choice other than to make the very best of this situation. Our priority has been to come up with options which are fair and which do not impact on those in most need.”
Forest Heath District Council and St Edmundsbury Borough Council are also conducting surveys to help decide where the costs of the new system should fall. Forest Heath currently collects �102,441 on second homes annually, while St Edmundsbury takes �158,404.
Stephen Edwards and Dave Ray, responsible for resources in the respective regions, said both councils had also considered a blanket tax increase and cuts to other services, adding: “We have considered other options, such as putting up council tax for everyone to meet the shortfall, but we know most people do not want us to do that. We could also cut the funding for other services, but that does not seem fair. It’s up to us to see that this burden is shared fairly among those who currently receive benefit or a discount and we welcome people’s views to help us decide exactly how we do this.”
Ipswich Borough contains just 333 second homes and is likely to make a less significant saving by scrapping the 10% discount. Leader, David Ellesmere, said: “These proposals have been forced on to us by the Government - it is not something we would seek to do. However, we are consulting with the public over the next few months and will try to share the pain in order to protect the most vulnerable in our society as much as we can.”
The consultations, which close on October 26, are being conducted separately because each council, although asking identical questions, could choose to implement different Local Council Tax Support Schemes.
Consultation forms and leaflets are being sent to people currently receiving a council tax discount. Consultation is also open to all other residents, with forms available at each authority’s main offices or via their websites.
The four options being considered by each of Suffolk’s borough and district councils:
Working age people who receive council tax support pay more council tax
Owners of second homes pay more council tax.
Owners of empty homes pay more council tax.
People who benefit from the second adult rebate pay more council tax
The number of second homes in each borough or district:
Suffolk Coastal: 2,600
Mid Suffolk: 412
St Edmundsbury: 249
Forest Heath: 175