200% Council Tax for inherited retirement flat I can't sell, sublet or live in (costing £8K/year)

Kim_13

Just been on Reading Borough Council's website and it says 200% council tax is payable on properties that have been empty for more than a year from 1st April 2024 - so they would seem to have been incorrect in charging more than the usual rate before then. Others will know if their approach is contrary to government legislation (I always thought it was 2 years before they could charge a premium.) Absolutely ridiculous that they will not waive at least that premium - you could not have done any more to bring the property back into use, which is what it's designed to encourage.

You may not have time with Trading 21, but could an auctioneer not have stipulated Trading 21's requirements when marketing the property?

AdamDavidson

I asked the estate agent about an auction, with no reserve, but he said it would cost £1500 and it would be unlikely anyone would buy it. It can’t be bought by an investor, it can only be bought be the person (or couple), over 55, that are going to live in it. He said he has 4 blocks on his books, each with multiple properties and none of them are selling currently. 

Kim_13

Did you correctly receive a Class F exemption from Council Tax at first? No council tax can be charged until 6 months have passed from probate, so the estate should only have been being billed from around about last Autumn unless probate was incredibly quick. 

AdamDavidson

I did receive an exemption for the first 6 months following probate, which was granted in May 2023 (mum passed away December 2022 so 6 months later). I put the property on the market for sale same day. The first council tax bill was from Nov 2023 to March 2024, at the standard rate which amounted to £652.08. Then I received a new bill for the forthcoming year which includes the 200% premium tax from 1st April 2024 as you correctly identified from the Reading Council Website. Here is a redacted version of the later council tax bill if it helps:

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Slinky

How can such a low value flat be Band B? I know it's a backdated value to an arbitrary date in the past (I forget which), but would a (presumably one bed) retirement flat be anything other than Band A? Have you checked the council tax banding on similar flats in the same block and elsewhere?

AdamDavidson

Here is the service charge, which can also no longer be paid, hence Housing21 suggesting foreclosure according to the terms of the lease. During a 50 minute phone call with their head of retirement living, no option was offered to defer payments until a sale could be made, only the foreclosure "option". He was sympathetic to a point but said Housing21 couldn't allow deferred payments as it would be a risk to cash flow. 

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AdamDavidson

Slinky said:

How can such a low value flat be Band B? I know it's a backdated value to an arbitrary date in the past (I forget which), but would a (presumably one bed) retirement flat be anything other than Band A? Have you checked the council tax banding on similar flats in the same block and elsewhere?

I've no idea why it's not Band A TBH. It is a 1 bed retirement flat. It's not a studio/bedsit though, there are 4 rooms, bedroom, bathroom, kitchen, living room. Maybe that's why it's Band B. It's also only a 70% share of the lease, with the other 30% being retained by Housing21 (the landlord).

Slinky

They are all Band B in that block.

Kim_13

Round here (which I’d have thought would be cheaper than Reading) all retirement properties seem to be banded higher than if similar accommodation were just a normal flat. If the other properties are all B, the VOA won’t budge. 

Nothing seems untoward with that council tax bill (unless any legislation can be found that wouldn’t allow for a premium yet) - a shame, I was thinking that there might be money to be reclaimed that could buy more time with Trading21 so that a buyer would be more likely to be found. 

It’s also possible that repeated price drops and multiple properties not selling are making potential buyers run a mile. Such an infuriating situation - they couldn’t charge council tax if occupation was prohibited by law, but Trading 21’s rules aren’t the law even though they impinge on everything you could possibly do to remove the estate from being liable for council tax.

General_Grant

So AdamDavidson said:

Here is the service charge, which can also no longer be paid, hence Housing21 suggesting foreclosure according to the terms of the lease. During a 50 minute phone call with their head of retirement living, no option was offered to defer payments until a sale could be made, only the foreclosure "option". He was sympathetic to a point but said Housing21 couldn't allow deferred payments as it would be a risk to cash flow. 

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I wonder what a Court Manger is.
Do they have horses there too?