Introduction of Council Tax on Empty Properties

Introduction of Council Tax on Empty Properties

In recent years, the issue of vacant buildings, unfinished constructions, and empty plots has become one of the key urban development challenges. These properties not only deteriorate the aesthetic appearance of the city but also create unfavorable living and business conditions. Therefore, it is proposed to introduce a tax on empty properties (Council Tax on Empty Properties1).

In the United Kingdom, various regions have implemented their own approaches to taxing empty homes. In Wales, premiums were introduced for empty homes, and grants were provided for their repair and restoration. Local authorities can set a tax rate of up to two hundred percent for properties that have been vacant for more than two years, encouraging their use. In London, such a measure has already proven effective. Due to tax premiums, property owners are forced to either use their properties or sell them, which contributes to more efficient use of urban space. In Vancouver and Toronto, Canada, if a property is not used as a primary residence or is not rented out, it is taxed at one percent of the current assessed value.

All properties in the UK that have not been used for a long time are subject to additional taxes according to the following scheme:

• 1 to 5 years: additional tax of 100% of the base tax.

• 5 to 10 years: additional tax of 200% of the base tax.

• More than 10 years: additional tax of 300% of the base tax.

The mechanism for assessing and taxing vacant properties includes several stages. Identification of vacant residential buildings is carried out using data from municipal services and property registries, vacant land is determined by cadastral data and land condition monitoring, and vacant business properties are analyzed through business registrations and tax data.

After identification, properties are assessed based on their market value. The tax is calculated as a percentage of the assessed value. For example, Vancouver has introduced a tax on empty homes, which is one percent of the assessed value. For vacant business properties and frozen construction sites, the mechanism can be similar, taking into account the specific use of land and properties.

Based on the tax collection map (Fig. 1) developed by the Almaty City Development Center, it is possible to assess average tax revenues from land plots in the city. Using this tool, one can more accurately determine tax revenues from each plot and evaluate potential losses from unfinished buildings and vacant properties.

And

Fig. 1. Display of tax revenues for Almaty

there is an opportunity to determine recommended tax rates that will stimulate the use of vacant properties and minimize the city's economic losses.

 

Based on the above analysis and international experience, it is proposed to initiate a pilot project to stimulate the use of vacant properties and unfinished buildings in one of the districts of Almaty.