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bigduckontax
bigduckontax, Accountant
Category: Law
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Experience:  FCCA FCMA CGMA ACIS
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I own outright a piece of land which was brownfield (office,

Customer Question

I own outright a piece of land which was brownfield (office, workshop, etc) and now I have planning permission for 8 houses, do I pay council tax on this land while waiting for a buyer/builder top purchase?
Submitted: 2 years ago.
Category: Law
Expert:  bigduckontax replied 2 years ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to help you with your question.

Council Tax is bedevilled by different councils making different interpretations. However, here is some guidance from the Gov UK web site:

'If your property’s derelict

.

Your property’s only considered derelict if it:

isn’t possible to live in it, eg because it’s been damaged by weather, rot or vandalism

would need major structural works to make it ‘wind and watertight’ again

You can apply to get a derelict property removed from the Council Tax valuation list. You do this by making a formal challenge to the VQA.'

A route can be found through this web site:

https://www.gov.uk/council-tax/second-homes-and-empty-properties

Of course, you may find that the site is not on the valuation list at all, or if it is it reflects its original use which is no longer appropriate. Usually you have six months to dispose of such properties without incurring the tax, but as I have suggested the key is its place in the valuation list, if any. This may need amending.

I would be of the opinion that a vacant brownfield site cannot be the subject of council, but see the key above. I am supported by a political comment from Labour List [advocating a Land Value Tax]:

'With no tax on empty land in the UK, it can be more lucrative to acquire and hold onto swathes of empty land, watch its value rise as others invest in the area, and then sell it, than it is to develop it for people to live or work on.'

The original Capital Gains Tax in 1965 was created in part as an attempt to stop organisations acquiring, particularly office blocks [see Centre Point], and then leaving them empty, also to prevent people putting income into property, thus avoiding tax when the value increased and they sold tax free.

I do hope that I have been able to asist you with your inquiry and shed some light on your position.

Customer: replied 2 years ago.

Unfortunately it does not answer my question only offers up alternatives which I have already looked at on google, it is a specific question to which I have not received a specific answer. I understand that I would need to contact the Valuation office of the council and have it reassessed once the warehouse has been demolished but until then I am responsible for a brownfield site which is not in use but must pay the rates based on RV.

Expert:  bigduckontax replied 2 years ago.

In fact, with respect, you have. You enquired about Coulcil Tax on your vacant site and were advised that no such tax was in fact due, but because of errors in the valuation list that might need amendment through the VQA.

Now you refer to rates, presumably you mean business rates. Manchester City Council advise [edited]:

'You would be expected to may business rates after three months, although there are moves to change this. However, you should, If your property is in poor condition [which being a vacant site it is] and cannot be economically repaired, the Valuation Officer may decide that it should be taken out of the rating list altogether.'

So once again it is back to the VQA if the property is still in the rating list.