Foreign firms should be banned from purchasing UK properties in a bid to cut the number of offices and dwellings left empty particularly in London, MPs have heard.
Tory Huw Merriman called for the “radical step” as MPs debated new legislation which would give councils the power to double council tax on homes empty for two years or more – up from a current premium of 50%.
It is estimated there are 200,000 vacant properties across the country, although this number has fallen by around a third since 2010, according to the Government.
Mr Merriman, speaking in the Commons, said: “When it comes to properties in central London that are unoccupied some investment companies from overseas can just pay this extra amount.”
The Bexhill and Battle MP added: “The time is right to start looking at prohibiting foreign companies from purchasing investment in this country, perhaps a radical step for me as a Conservative but one wonders whether the time has come to at least have that conversation.”
During the debate on the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill ministers were also urged to reconsider plans to not offer compensation to local authorities following legislation to reverse the so-called “staircase tax”.
Labour’s Clive Betts, chairman of the Housing, Communities and Local Government Committee, said the Government had committed that local authorities would be compensated for any financial costs of the measure.
But Housing minister Dominic Raab claimed local authorities had experienced an “inadvertent windfall” as a result of the decision by the Supreme Court last year that firms operating in adjoining rooms or units which were accessed by a common corridor or staircase should be taxed as if they were separate premises.
The decision left many firms facing significant additional bills backdated to April 2015.
Mr Betts later said that the Government was doing “nothing” about the impact on individual authorities and asked Mr Raab to look again.
The minister said: “We clarified the situation for local authorities after the budget, we’ve written to local authorities, I don’t think it would be right, I have to say to (Mr Betts), to be compensating local authorities for an inadvertent, effectively an inadvertent, windfall as a result of a judicial determination that was from the point of view of Government policy not what we wanted to see and we’ve moved as swiftly as we can reasonably to correct it.”
Tory Bob Blackman (Harrow East) said “many local authorities” would have to “repay that money once the law is changed back again”.
“But they’ve used that money – it’s not money that they weren’t expecting because they’ve had a judgment, they’ve used it in their budget and now if the Government says ‘well yes you’ve got to repay the money but we’re not going to compensate you for that repayment’ – then that actually that’s a windfall to the Government.”
Mr Raab said the Bill seeks to promote fairness for “hard-pressed businesses who face an unjustified tax hike because of the so-called staircase tax” and for “families, young people and many others who see properties lying empty whilst they struggle to find somewhere to live”.
The bill passed through its second reading without a vote and will now be given line by line scrutiny at committee.