A judgment has recently been issued in connection with three co-joined appeals on whether a charitable housing association is entitled to council tax exemption for the void periods between lets. The housing associations involved were Notting Hill Housing Trust and A2 Dominion Housing Group Limited.
Prior to 1 April 2013 such bodies could claim exemption on the basis that there was a general exemption for dwellings which had been vacant for a continuous period of less than six months. Unfortunately this exemption was repealed so that the housing associations in question sought to rely on a separate exemption, Class B, the extent of which had not previously been tested.
Class B provides exemption for a dwelling owned by a body established for charitable purposes only, which is unoccupied and has been so far a period of less than 6 months and was last occupied in furtherance of the objects of the charity.
Both associations were private registered providers of social housing and exempt charities. They had appealed against refusals by the local authorities to grant them exemption under Class B in 3 cases. The President of the Valuation Tribunal for England had allowed their appeals on the basis that as they were charities then there was a presumption that the last occupation was “in furtherance of the objects of the charity” and so satisfied Class B.
The local authorities appealed this decision. In allowing one appeal but dismissing the other two, Mr J. Mostyn held that although the President was wrong in holding that such a presumption existed (though he could see the need for one) the evidence required by such bodies to satisfy the exemption had not been satisfied in two out of the three cases
He held that the following requirements must be met by a housing association for this exemption to be available:
- the dwelling must be owned by the body in question;
- the body must be established for charitable purposes only;
- the dwelling must have been unoccupied for a period of less than six months; and
- the last occupation must have been in furtherance of the objects of the charity.
The judge held that it was incumbent on the housing association to prove all four points before the exemption was available. He rejected the Valuation Tribunal’s decision that there was a presumption that conditions b and d were satisfied because the housing associations were registered charities.
He went on to say that he considered that “a short written representation by the applicant (which might usefully be done on some kind of standard form) which addresses all four conditions directly and which states (a) that based on the material held by the applicant the conditions are met and (b) that the statement is true to the belief of the representor, should normally be enough.”
Notwithstanding that the housing associations lost on two out of the three cases it is clear that the evidence required to be submitted by such associations is fairly limited in order to succeed. This has a significant cost benefit for the associations as in future it should be sufficient to produce a statement along the lines recommended by the Judge to satisfy the Class B criteria. This will provide significant cost savings for housing associations in general.