(Bloomberg) -- An attempt by the U.K.’s most expensive borough to penalize homeowners who leave properties empty isn’t having much impact.
More than 690 homes in London’s Kensington & Chelsea have been left vacant and unfurnished for more than two years, despite the introduction of a 50 percent levy on council tax for affected homes. That’s up from 660 in April 2015. The highest council-tax rate in the borough is almost 2,100 pounds ($2,620) a year.
Mayor of London Sadiq Khan asked London School of Economics to conduct an investigation into overseas investment in the U.K. capital because of rising costs and the buy-to-leave phenomenon, where homes are purchased and left empty. A typical home in Kensington & Chelsea sold for more than 2 million pounds in January, according to data compiled by LSL Property Services/Acadata.
The amount raised from the levy could be as much as 1.63 million pounds for the 2017 to 2018 tax year if the properties remain empty for the whole year, a spokeswoman for Kensington & Chelsea said in an email. The measure excludes homes that are empty and furnished because they may be second homes, the email said. The council did not comment further.
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