TOUGH new powers that cut council tax discounts on second or investment homes are to come into force in York.

Under the Local Government Act, due to come into force in two months, councils can vary the council tax discount on second homes.

The discount currently stands at 50 per cent but the act gives councils the power to drop it as low as ten per cent.

On properties classed as long-term empty, unoccupied for six or twelve months depending on certain circumstances, the discount can be removed entirely.

Currently 670 York homes are classed as second homes while a further 475 are classed as long-term empty.

About £300,000 extra per year would enter council coffers if the maximum available tax was raised under the powers.

Council leader Steve Galloway said: "Obviously the extra money would be welcome. We would have an appeals procedure to deal with hardship cases, such as cases where people who are not massively wealthy might inherit a property and not be able to dispose of it quickly.

"In terms of people who are wealthy enough to own second homes, or investment homes, we do not see why they should not pay a full share for the provision of council services."

Ruth Potter, shadow executive member for housing, said the council's Labour group supported the new powers.

She said: "Paying the reduced rate of council tax on second or investment homes is a subsidy. People who own second homes should make a full contribution towards local services."

The council tax was brought in the by the then Tory Government as a replacement for the deeply unpopular poll tax.

The party's York spokesman, John Galvin, called for caution on the long term empty properties charge.

Homes could become empty because of illness or hospitalisation, he said.

He called for a larger discount on second homes.

"People with second homes in York do not avail themselves of a full range of council services and also bring money into the city," Mr Galvin said.

The powers are expected to be used for the first time in the next financial year.

Updated: 10:36 Saturday, October 04, 2003