Government could unlock millions of pounds by scrapping council tax discounts

More than £602 million a year extra revenue could be generated in London alone, claims report

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The Independent Online

After analysing second home numbers and council tax discounts across London, Chesterton Humberts’ research department estimates that if all major council tax discounts were scrapped, £602 million per annum extra revenue could theoretically be made from London.

Students, foreign diplomats and prisoners do not pay council tax while single occupancy properties are given a 25 per cent discount and second homes are discounted by 10-50 per cent. Of the £602,274,198 worth of council tax discounts, the student discount accounts for £138,876,000 and the single occupancy discount for a further £418,968,502.

The authors of the report admit that in practice it would not be feasible for the Government to scrap these council tax discounts, but that it is currently exploring the idea of scrapping council tax discounts on second residences. 

If implemented, Chesterton Humberts estimates that only £4 million a year would be produced from the 31,000 second homes in London, which represent 11 per cent of the country’s stock of second homes. Taking into account the whole of England & Wales, they estimate the additional revenue would be around £127m.