Merton is one of seven councils in London which has failed to make use of powers to penalise homeowners who leave houses empty for more than two years.
The Empty Homes Premium, introduced last April, empowers councils to charge property owners an extra 50 per cent council tax for leaving houses vacant long-term.
Councillor Nick Draper, cabinet member for community and culture, said: "Before the election we wouldn't have got it through.
"We looked into it and we knew that it was going to be a controversial position but we didn't believe that it would be a viable thing to do politically."
Blaming the complexity of making decisions in a minority council, he said Labour-run Merton Council does intend to make use of the powers, but could not say when.
He said: "When we do introduce it, the reason that we want to do it is because we want to bring these houses back into use."
Coun Draper estimates there are about 200 empty homes in Merton which would be eligible for the extra tax.
The scandal comes as London boroughs are under increasing pressure from the Mayor of London to increase housing provisions for the city's growing population.
Councillor Janice Howard, Merton Conservatives cabinet member for housing, said: "They should be taking up the Empty Homes Premium because we are in desperate need of houses and it's an easy way of refurbishing what would be derelict houses and helping people into a home."
The revelation that Merton, along with Kensington and Chelsea, Westminster, Bromley, Havering, Hillingdon and Kingston-upon-Thames have not made use of the power, emerged from a Freedom of Information Act obtained by the BBC.