The new changes to empty home council tax rates could generate an additional £540million for local authorities, research suggests.

Since April 2013, billing authorities have had the power to charge council tax premiums of 50 percent on homes that have been unoccupied for two years or more.

In April 2019, this was adjusted so that premiums of 100 percent could be applied to homes that have sat empty for two years or more.

However, from April 1, the power to charge a premium of 100 percent of a properties council tax bill will now apply to homes that have been empty for 12 months.

Research conducted by Benham and Reeves shows there are some 261,189 homes that have been classed as empty for six months or more across England.

With the average cost of council tax coming in at £2,065 per property, this means that councils across England currently collect an estimated £540million in council tax on empty homes each year.

Should these homes continue to sit empty for up to 12 months or longer, this would see the council tax charged per property climb to an average of £4,130, netting councils a total of £1.1billion in council tax on empty homes over a year.

In the North West, councils are poised to receive the most significant increase in council tax revenues from vacant homes.

With approximately 42,454 empty properties, councils in the region currently generate an estimated £91million annually from council tax on vacant properties. Under the new legislation, this figure could potentially double to £182.1million per year.

In the South East, council tax collected on empty homes could potentially double to £146.3million from the £73.1million currently collected.

London ranks third, where an estimated £65.2million is currently collected in council tax annually from the 36,210 empty homes found across the capital. This amount could potentially double to £130.4 million under the new regulations.

Marc von Grundherr, director of Benham and Reeves, commented: “We’re yet to see the Government attempt to resolve the housing crisis in a meaningful way and not only have they neglected the issue of supply for many years, but it’s quite frankly scandalous that so many homes are sitting empty across the nation when we’re in desperate need of more housing stock.

“While new changes to the council tax premiums charged on empty homes show that they are aware of the problem, it’s fair to say that it’s unlikely to act as the deterrent they expect when it comes to forcing these empty homes back into circulation.”

However, he noted: “These changes do have the potential to bring a sizable boost to the coffers of our local councils and we can only hope that this additional income is utilised to help address the issue of housing availability.

“When you consider the money they stand to make, it does highlight the benefit of utilising these empty homes to at least address the issue of supply within the rental sector.

“Rather than pay a 100 percent council tax premium, these properties could be generating rental income, while also providing tenants with the homes they desperately need.”