Welsh Government is looking to introduce new rules to ensure second homeowners are making a fair contribution to Welsh communities.
These rules will introduce changes to local taxes which can be used by local authorities to tackle the impact of second homes and commercial holiday lets in some of Wales’ communities.
Second homes and holiday lets are a large point of contention in particular areas of Wales. Read more about a community where an 88-year-old says he’s the only Welshman left when visitors leave.
What could the new rules be?
- Properties will need to be defined as second homes, and long-term empty properties (empty for more than a year) for council tax purposes.
- To ensure those owning second homes as businesses are also contributing, they will have to be defined as non‑domestic, self-catering accommodation.
- The maximum level at which local authorities can set council tax premiums on the above properties will be set. Currently, this stands at 100%, but the consultation questions suggest it could be increased further.
Read more: Second home owners will have to pay higher taxes and register in plan to tackle crisis
What will the money go towards?
It is hoped this additional income will allow councils to address issues affecting the areas, such as:
- The supply of affordable housing
- Provision of public services
- Funding other facilities such as public transport.
Additionally, they are hoping to prevent the impact that the high level of second homes and holiday lets could have on Welsh as a community language.
Who will have to register their homes?
- If your property is available for “short periods totalling 140 days or more in the following 12 month period.”
- The ratepayer’s interest in the property enables them to let it for such periods.
In the 12 months prior to assessment, the property has been available for letting commercially as self-catering accommodation for short periods totalling 140 days or more.
The short periods it has actually been commercially let for amounted to at least 70 days during that period.
Currently, there are 24,900 second homes liable for council tax in Wales. Of these, more than 15,800 are paying premiums.
Additionally, of the 25,700 long-term empty properties, only 7,300 are paying premiums.
The remaining second homes and long-term empty properties are either in authorities that have chosen not to apply a premium or are in one of the classes which cannot be charged a premium. However, they continue to be liable for council tax at the standard rate.
Ahead of any changes, Welsh Government are asking for views of those living in affected communities and those with additional residences.
They acknowledge second homeowners and those who stay in holiday lets “make an important contribution to our local economies,” however, they “want to ensure all homeowners and businesses make a fair contribution to the communities in which they own or let property.”
The consultation
There are 14 questions in the online form including:
How could local authorities’ best use the premiums to help bring empty or underused properties back into use to improve housing supply and the sustainability of local communities?
Is the current maximum premium of 100% appropriate? If not, what?
What do you see as the impacts, both positive and negative, of self-catering accommodation?
What are your views on the current criteria and thresholds for defining property as self-catering accommodation and liable for non-domestic rates?
Do you think the self-catering accommodation thresholds should be changed and, if so, why?
What are your views on the eligibility of self-catering accommodation for Small Business Rates Relief?
Are there other ways in which you think the local tax system could be used to the support the sustainability of our communities?
We would like to know your views on the effects that these proposals would have on the Welsh language, specifically on opportunities for people to use Welsh and on treating the Welsh language no less favourably than English.What effects do you think there would be? How could positive effects be increased, or negative effects be mitigated?
Please also explain how you believe the proposed policy approach could be formulated or changed so as to have positive effects or increased positive effects on opportunities for people to use the Welsh language and on treating the Welsh language no less favourably than the English language, and no adverse effects on opportunities for people to use the Welsh language and on treating the Welsh language no less favourably than the English language.
Finance and Local Government Minister Rebecca Evans said: “We want to hear from people living in communities affected by these issues as well as owners of second homes and holiday lets, trade representatives of the self-catering and tourism industry, and local authorities.
“We anticipate receiving a wide range of responses which will all inform our future policies on potential changes to local taxes so that we have a fairer system for everyone.”
It is also hoped that these new rules will help to preserve the Welsh language.
Climate Change Minister Julie James who launched the Welsh Government’s consultation on council tax and non-domestic rates last month said: “We cherish our reputation in Wales as a welcoming, bilingual society in which tourism and current second home owners have a contribution to make.
“However we also recognise the impact that higher numbers of second homes and self-catered holiday lets can have on local housing and rental markets and on the sustainability of local communities.
“In some areas they may compromise the sustainability of Welsh as a community language.”
Jeremy Miles, Minister for Education and the Welsh Language said : “Ensuring that local people can live in the communities in which they grew up and maintaining the health and vitality of Welsh as a thriving community language, are top priorities for the Welsh Government.”
The consultation period ends on November 17th, 2021.
Would you like to see changes come in as suggested? Let us know in the comments.
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