Wales second homes could face 300% council tax hikes

Some second home owners in Wales could pay four times their current level of council tax from next year, the Welsh government has announced.

Currently councils can charge a second home premium of up to 100% but that will increase to 300% from April 2023.

The move, included in a Labour-Plaid Cymru cooperation agreement, is part of efforts to make it easier for people to afford homes where they grew up.

A homeowners' group said the move was "morally indefensible".

"It's astounding and morally indefensible," Jonathan Martin, a spokesman for the Home Owners of Wales Group, told BBC Radio Wales Breakfast.

"Where do they think we're going to get this 300% from? I can't afford it, that's for sure and I'm quite sure a lot of other people can't afford it. It's just astounding."

Mr Martin, who lives in Altrincham, Greater Manchester, and has a second home in Gwynedd, said most of the group visit their homes regularly.

"They love Wales, they love Welsh people, they love the Welsh language, they love the Welsh culture. That's why they have a home there," he added.

He also criticised the timing following the pandemic and amid the rising cost of living, but said his group were ready for a fight.

"I think the biggest threat to the Welsh government will be that we've been advised it's absolutely unlawful," he added.

"So I don't know where we go from that but we'll have to have a big discussion as a group. We're financially able to take on the Welsh government if they forced this through without further acquiescence with us."

Gwynedd and Swansea are already charging a 100% premium and Pembrokeshire will do so from next month.

Welsh ministers are encouraging councils to put the extra money raised into increasing the amount of affordable housing.

The Welsh government will also tighten up the rules on self-catering accommodation being liable for business rates rather than council tax from next year.

At the moment properties available to let for a minimum of 140 days in any 12-month period, and actually let for at least 70 days, pay rates not council tax.

Under the changes properties must be available to let for at least 252 days, and actually let for at least 182 days to qualify.

The government said this would make it clearer that the premises are genuine holiday accommodation making a "substantial contribution" to the local economy.

In some parts of Wales, particular coastal areas, second homes are a contentious issue, with people feeling they are pricing them out of the area they grew up in and threatening the Welsh-speaking culture.

Meanwhile, second home-owners argue they feel like they are being "discriminated against" for buying homes in desirable areas.

According to the Welsh government council tax premiums are being paid on more than 23,000 properties in Wales this year.

Some homes are exempt from the premium - such as those needed for employees.

In the 2022-23 tax year nine authorities will charge a premium, ranging from 25% in Conwy and Ceredigion, 50% in Anglesey, Flintshire, Denbighshire and Powys, and 100% in Gwynedd, Pembrokeshire and Swansea.

Both Pembrokeshire and Gwynedd have the largest number of second homes that are subject to a premium, at 3,746 and 3,794 respectively.

Ministers will also raise the maximum premium for empty homes to 300%.

Finance and Local Government Minister Rebecca Evans said the changes, which follow consultations with businesses and the tourist industry, "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."

Plaid Cymru's Sian Gwenllian said: "So many people cannot afford to live in their local areas, and the situation has worsened during the pandemic.

"These changes will make a difference, enabling councils to respond to their local circumstances, and start to close the loophole in the current law.

"It's a first, but important, step on a journey towards a new housing system that ensures that people have the right to live in their community."

The Conservatives accused ministers of "punishing aspiration and investment".

Janet Finch-Saunders, who speaks for the Welsh Conservatives on housing, accused Labour ministers of "pandering to their nationalist coalition partners and punishing aspiration and investment in Wales".

"The housing crisis is a direct result of years of successive Labour-led governments failing to provide opportunities and build enough houses, with housebuilding falling below levels before devolution."

She said there were "more empty homes in Wales than there are second homes" and this was not being addressed by ministers, who should "get a grip" and "address the housing shortage in Wales".