300% Council tax premiums on second homes in Wales

300% Council tax premiums on second homes in Wales

11:34 AM, 9th March 2022, About 3 months ago 3

Text Size

The Welsh Government has increased the maximum level at which local authorities can set council tax premiums on second homes and long-term empty properties to 300%, effective from April 2023, as well as new local tax rules for holiday lets.

This will enable councils to decide the level which is appropriate for their individual local circumstances. Councils will be able to set the premium at any level up to the maximum, and they will be able to apply different premiums to second homes and long-term empty dwellings.

Premiums are currently set at a maximum level of 100% and were paid on more than 23,000 properties in Wales this year. Local authorities opting to apply premiums have access to additional funding, and the Welsh Government has encouraged councils to use these resources to improve the supply of affordable housing.

The criteria for self-catering accommodation being liable for business rates instead of council tax will also change from next April.

Currently, properties that are available to let for at least 140 days, and that are actually let for at least 70 days, will pay rates rather than council tax. The change will increase these thresholds to being available to let for at least 252 days and actually let for at least 182 days in any 12-month period.

The change is intended to provide a clearer demonstration that the properties concerned are being let regularly as part of genuine holiday accommodation businesses making a substantial contribution to the local economy.

Both changes follow a consultation processes including businesses, the tourism industry and local communities.

Rebecca Evans, Minister for Finance and Local Government, said: “These changes will give more flexibility to local authorities and provide more support to local communities in addressing the negative impacts that second homes and long-term empty properties can have. They are some of the levers we have available to us as we seek to create a fairer system.

“We will continue to make every effort to increase the supply and availability of houses, as shown by the £1bn of funding to build 20,000 low carbon social homes, contained in the budget I published at the end of last year.”



Comments

by Girish

12:24 PM, 9th March 2022, About 3 months ago

Tenants will end up paying the bill in the long run, or landlords will leave the market.. eventually councils will end up funding the homeless, and build more houses.
Short sighted quick fix policy.

by Freda Blogs

13:51 PM, 9th March 2022, About 3 months ago

The various councils will have to think carefully.

As we have seen so frequently with government policy, there may be unintended consequences.
If the financial provisions are so punitive, such that ownership becomes too risky or uneconomic, owners will sell, which in turn could adversely affect the availability of property both for holiday lets (and the people who are employed in the tourist sector) and for private renting - so could be a significant own goal.

by joss URCH

19:19 PM, 10th March 2022, About 3 months ago

Well done Wales! We have just invested 5 years of our lives, night and day, bringing a listed 19th century house that was left to rack and ruin for 16 years back to life with the help of local tradespeople. It is now a thriving holiday home with bookings throughout the whole of the coming year.
I don't know how the council can justify charging us more for what? Bringing business to Wales? We have paid the premium so far but now we have no choice but to flip it on to Business rates so no more Council tax at all from us for the coffers of Gwynedd. Nice one.
Why don't the council call it a stinking wealth tax as this is more honest than making out we use more council services etc.
It is short sighted, divisive and damaging to beautiful Wales and the lovely people who live there.
Next there will be corporate company tax advantages on holiday homes pushing out the small landlords who do it because they love it and not just for profit. Why not take a look at Portugal who are offering massive tax breaks for people to invest in property there. JUST BUILD MORE AFFORDABLE HOMES


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

BECOME A MEMBER

Landlord Tax Planning Book Now