Labour rejects own MP's calls for council tax exemption on retirement homes

Telegraph

7 hours ago

Labour has rejected calls from its own MP to grant council tax exemptions for families struggling to sell inherited retirement homes.
Anna Dixon, MP for Shipley, urged the Ministry of Housing, Communities and Local Government – the government department headed by Angela Rayner – to give grieving relatives more time to sell up retirement properties before being hit with the second home council tax premium.
It comes after The Telegraph drew attention to the double taxes being charged on 'impossible to sell' inherited retirement homes.
These properties are designed for people aged 55 and over, and can only be sold to people in that age bracket, meaning they can take years to sell. They also come with hefty service charges, and typically depreciate in value, making them unattractive to buyers.
From April 1, all local authorities in England were given the powers to charge 100pc council tax premiums on second homes in their region.
However, if an owner puts their home on the market, they can escape the charge for 12 months. If they are not sold in this time period, the charge is reapplied.
In a parliamentary question, Ms Dixon asked Ms Rayner if she will 'extend the time limit on exceptions to council tax premiums to cover the full period for which a property is being actively marketed for sale for (a) long-term empty homes, (b) second homes and (c) leasehold retirement properties'.
Jim McMahon, housing minister, said the Government had 'no plans to change the exceptions to the council tax premiums'.
'Inflexibility and obstinacy'
Retirement properties boomed in popularity during the 1980s, and remained attractive well into the early 2000s.
As of 2019, there were 730,000 retirement housing units in the UK, according to the Elderly Accommodation Counsel.
However, in recent years, their appeal has dramatically waned as complaints mounted among those early buyers. This is due to their hefty service charges, which are payable whether or not the property is lived in.
According to Hamptons, one in 10 retirement flats takes more than a year to sell.
The Telegraph has heard from dozens of families who have inherited the 'impossible to sell' properties, and are now being hit with double council tax, costing some people thousands of pounds.
Kevin Hollinrake, shadow housing minister, said: 'Labour should be actively reviewing how the new regime is working in practice.
'Their refusal to even consider extending the exemption for retirement properties shows a shocking disregard for bereaved families.
'These homes are notoriously hard to sell, and this tax burdens grieving families with unexpected and often unaffordable bills at one of the most difficult times in their lives.'
Dennis Reed, of senior citizens charity Silver Voices, said: 'This inflexibility and obstinacy by the Government flies in the face of fairness and equity. A hard to sell flat in a retirement complex is clearly not a second home unless a member of the family is living there.
'All the reasons for second home premiums do not apply in such circumstances, and Labour should be showing some empathy to those who have lost a loved one.'
A Ministry for Housing, Communities and Local Government spokesman said: 'It is for councils to determine whether to apply a premium on the council tax bills of second homes.
'Councils can opt to add up to 100pc extra on the council tax bills of second homes to help local leaders protect their communities.'