Views sought on using taxes to tackle 2nd homes issue

Views are being sought on potential changes to local taxes which could be used by local authorities to tackle the effects that large numbers of second homes and commercial holiday lets can have in some parts of Wales.

The Welsh Government consultation on council tax and non-domestic rates is part of a summer of action launched by Climate Change Minister Julie James last month to address the impact of second home ownership seen in some of Wales’ communities.

The government says: "While second home owners and people who stay in holiday lets can make an important contribution to our local economies, we want to ensure all homeowners and businesses make a fair contribution to the communities in which they own or let property."

The consultation will seek views on the maximum level at which local authorities can set council tax premiums on second homes and long-term empty properties and the criteria for a property to be defined as non‑domestic, self-catering accommodation.

Wales is still the only UK nation to give local authorities the power to introduce a 100 per cent council tax premium on both second homes and long-term empty homes (empty for more than a year).

This additional income can be used to address issues affecting the supply of affordable housing or for the provision of public services and other facilities such as public transport.

The consultation also seeks views on the circumstances in which properties are classed as self-catering businesses and are listed for non-domestic rates.

Currently all occupied small business properties below a specified rateable value, including self-catering units, are eligible for Small Business Rates Relief (SBRR), subject to a limit of two properties per business per local authority.

This consultation considers the criteria for defining properties as non-domestic self‑catering accommodation and whether different thresholds are needed.

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.”

Climate Change Minister Julie James 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.”