Tory says councils lose out by levying second home taxes

A politician is claiming that second home council tax premiums, where owners pay up to double the normal rate, is resulting in financial losses to local authorities.

Janet Finch-Saunders, Member of the Welsh Parliament for Aberconwy, submitted freedom of information requests asking, in relation to the council tax premium on second homes, for the financial losses from property owners switching from council tax to business rates.

She says several authorities have reported losses.

Ceredigion has seen a financial loss of £1m since 2016/17; Conwy has seen a financial loss of £1.8m since 2012/13; Pembrokeshire has seen a financial loss £3.6m of since 2019/20.In a statement on her website, Finch-Saunders says the figures would be higher if it was assumed that the properties switching from second homes to business rates in one financial year, remained qualified for business rates in the following financial years.

Commenting on the impact of the second home premium, she says: “The evidence from West Wales is clear that the second home premium is failing in its claimed aim of delivering more homes for people to live in.

“Authorities such as Conwy, Ceredigion, and Pembrokeshire are seeing high numbers of properties switching to qualify for business rates, rather than pay normal council tax, let alone the premium.

“At a time when local authorities across Wales are struggling financially, it is a major failure of Welsh Government that they have developed a second home policy for local authorities to implement that results in major financial losses.

“I do not doubt that there would now be more properties paying council tax, and money coming in to local authorities, should the second home premiums not have been introduced”.