Two Conservative Members of the Senedd have made a vitriolic attack on Welsh Government plans to crack down on second homes and holiday lets with higher taxes. The new plans include an increase to the maximum level of council tax premiums for second homes, as well rules that limit exemption from council tax for holiday let that register as businesses. The proposals in full are detailed in this story.
The maximum level at which local authorities can set council tax premiums on second homes and long-term empty properties will be increased to 300%, which will be effective from April 2023. 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. The full detail of that plan is here.
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.
Read more : A second home owner living in England says Welsh Government are hitting 'normal working people'
Brecon and Radnorshire MS, James Evans, spoke during the plenary session on Tuesday, March 23, saying businesses could go bust because they cannot meet the 300% council tax cost.
He said: "Today, I want to speak on behalf of those genuine tourism businesses that are going to be impacted by these regulations. I've been contacted by many genuine businesses that will be affected by this, with the increase in the days that they need to be let from. A lot of those businesses that genuinely set up their company so that people can come to Wales to enjoy our scenery, to spend money in our local areas, are very concerned that, if they do not meet the threshold for the amount of days let, their businesses will be forced to close, when those properties, which I'm sure you hope will go back on the open market, many of those are subject to planning restrictions, some of them are too big, they'll be too expensive and local people will not be able to afford them.
"And what I don't want to see is many businesses going bust, many businesses that can't afford to pay 300% council tax, because that is what's going to happen. When visitors come here, they are not going to have anywhere to stay. As my colleague Janet Finch-Saunders has said, this second home rhetoric has got to stop. The problem here is not second home owners, it's not people running genuine businesses, it's the Government here that have failed for years to build the houses that we need for our young people. This Government could abolish land transaction tax for young people.
"You could get on and build more houses. You could get rid of the phosphate regulations. But you haven't got a plan to address it. This is a typical socialist government. The only way you find of addressing problems is through tax, tax, tax. This is a tax on aspiration, it's a tax on tourism, and it's a tax against people visiting Wales. So, I suggest the Government gets on, builds more houses and puts policies in place that actually support young people to buy homes and not tax people off the face of this earth."
Fellow Conservative, Janet Finch Saunders, the MS for Aberconwy, who owns six properties in Conwy and a residential/holiday-let property in Menai Bridge with her daughter said "these regulations stem from failure, failure by successive Welsh Labour Governments to provide new homes".
"The only positive impact that these regulations will have is that they will contribute towards the commitment in the updated programme for government 2021-26 to seek to review council tax, and they will contribute to the objective in the co-operation agreement to provide greater powers to local authorities to charge council tax premiums whilst increasing taxes on second homes.
"The discretion given to local authorities to charge a premium is intended to be a tool to help local authorities to bring back long-term empty homes, and support local authorities in increasing the supply of affordable housing. However, there is absolutely no clarification as to how any extra revenue will be spent. As the explanatory memorandum makes clear, local authorities can use the funds as they see fit. In fact, there is clear lack of appetite and support for your proposals."
