Unoccupied CouncilTax

reefs

Hi,

A lot of detail here, I'll summarise as best I can.

2007 - House Bought, Interest only mortgage
2012 - House Value less than mortgage
House vacated to live with, boyfriend, now husband
£20k spend upgrading, placed on rental market
2013 - Rental market failure, house for sale (-40k)
2015 - backdated unoccupied Council a Tax Bill
Complaint sent, no reply
2nd back dated bill
Complaint sent no reply
2016, Christmas - Final reminder, Court Summons

Currently the house has been on the market for 3 years. We cannot reduce the asking price as we cannot pay the deficit on the mortgage.

We cannot reduce the asking price, as we are in debt

We cannot rent the property as it breaches our mortgage agreement.

We cannot remortgage as the property is in negative equity.

We cannot live in the old vacated home as we have a new home, family provide childcare at the current home. Child care at the old home would be £10k / year

Council are asking £3k fees as of today, after no response to complaints. Demanded in 7 days.

We are currently paying off old debts, we need some savings to reduce the selling price and pay the deficit in the mortgage.

This will take years, if we have to some how pay the council, this will take even more years.

What the hell do we do?

marliepanda

What are you complaining about in the complaints you say you sent?

Councils offer differing rates of unoccupied discounts. Mine offers 1 month free, 5 months half price and the rest is charged at full price. You need to find out what your councils policy is. Indeed some councils charge MORE for unoccupied properties.

You may well owe all the council tax they are asking for. Therefore you have to pay it. You can't get out of it. It's your property, so the council tax liability falls to you whether you live in it or not.

booksurr

you bought a house in 2007, you still own the house, you are liable for council tax as the ongoing owner of a now unoccupied house. The rest of your timeline and financial circumstances are irrelevant.

Be grateful the council has not classed it as an empty property because if that were so they can, after 2 years, charge you 150% of the normal rate.

you have failed to sell because you are still living in cloud cuckoo land thinking you can escape without a shortfall on your mortgage. You need to explore options for how you can get a loan to cover the mortgage shortfall before your debts increase even further, or you can go bankrupt and sell the second home you apparently now live in and start life again?

seven-day-weekend

Our Council only allows 6 weeks unoccupancy for Council Tax purposes; other than that Council Tax is due. I'm afraid you will have to pay it. Work out a payment plan with the Council.

The house is costing you money and will cost you more if you don't get rid of it. Sell it at auction, and organise a payment plan for the shortfall. You are not going to be able to sell it for the price you want if the market has dropped.

reefs

Thanks for your replies,

We have explained our financial situation to the council, even provided a full set of finances, bank accounts, loans, overdrafts, etc.

We have asked the council for a discount, and advice and guidance. They haven't responded at all, or offered any assistance or discount.

In regards to getting rid of the house, we haven't been able to. We have spoken the mortgage lender numerous times, citizens advice, debt management organisations, solicitors, legal helplines, family, friends, and now here. So far the advice has been keep paying the mortgage. We cannot arrange a loan to pay the deficit as this is not allowed in the terms any loans.

This is so out of control, debt is leading to more debt.

Bluebirdman_of_Alcathays

Then you will surely need to explore bankruptcy - this has not gone away over 9 years and from what you've said is unlikely to.

Do you own the house you currently live in? Sell that!

iantojones40

Quite amazing, with all the help that wreckless, fec kless, over-leveraged debt junkies have been given in the last few years courtesy of government and BoE policy, that someone can still find themselves in this situation... AND feel they're entitled to yet more help and financial assistance!

seven-day-weekend

reefs wrote: »

Thanks for your replies,

We have explained our financial situation to the council, even provided a full set of finances, bank accounts, loans, overdrafts, etc.

We have asked the council for a discount, and advice and guidance. They haven't responded at all, or offered any assistance or discount.

In regards to getting rid of the house, we haven't been able to. We have spoken the mortgage lender numerous times, citizens advice, debt management organisations, solicitors, legal helplines, family, friends, and now here. So far the advice has been keep paying the mortgage. We cannot arrange a loan to pay the deficit as this is not allowed in the terms any loans.

This is so out of control, debt is leading to more debt.

I don't think your debt is anything to do with the CT, if you officially have the income, you will have to pay it.

As regards loans, do you mean that you will not be allowed to take any more loans because you are fully committed? In that case I agree with others; all you can do is keep the house up for sale (in the vain hope that someone might pay your asking price), and carry on paying the mortgage.

Will your mortgage lender allow you a Consent to Let on the mortgage?

Could you sell the house you live in and move to the one in negative equity? Would that help?

anselld

OP, you are not going to get any helpful advice or sympathy from the Council and unless they have made a mistake your complaint will be pointless.

This is a debt problem, not housing or Council Tax. Suggest you start here ...
http://www.moneysavingexpert.com/loans/debt-help-plan#help

marliepanda

The council won't respond to complaints which basically say 'can't really afford that so why should I have to pay'

Council tax reduction Discounts are based on income, not expenditure, so if you don't qualify, you don't get it. Debts are not taken into account.

CIS

I can't see that the local authority have done anything wrong - they can only apply the legislation as it stands.

Assuming you're in England then , after two years of the property being unoccupied and substantially unfurnished, the property automatically falls in to the empty property premium (unless it is otherwise eligible for an exemption) at the rate set by the local authority (it's not discretionary whether or not if falls as a long-term empty, the only choice the choice the council have is the rate they set as an authority). S12 of the LGFA 2012.

If the property has been unoccupied and substantially unfurnished for more than 2 years and the council haven't applied the premium then they'll work it out at some point and issue a revised demand notice.

You could ask for a Section 13A reduction on hardship - http://lgfa92.co.uk/section-13a-write-off/ . They have to consider the application but they don't have to grant any reduction.

Craig