ARLA Propertymark has slammed politicians who appear to have ignored a public consultation and gone ahead with draconian changes affecting second homes and holiday lets.
The Welsh Government has announced an increase to the maximum level of council tax premiums for second homes, as well as new local tax rules for holiday lets. The move follows a political agreement between the Labour-led Welsh Government and the Welsh nationalist party, Plaid Cymru.
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 per cent, 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.
Premiums are currently set at a maximum level of 100 per cent and were paid on more than 23,000 properties in Wales in the past year. The Welsh Government is urging councils to use revenue raised from the premiums 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.
A statement from the Welsh Government says that 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.
However, this raft of restrictions has been sharply criticised by ARLA Propertymark’s policy manager Daryl McIntish.
He says: “The Welsh Government’s decision to enable the council tax premium on second homes to be raised to a maximum of 300 per cent from April 2023 is somewhat surprising, given that 79 per cent of respondents to the consultation felt that the powers had 'very little or no effect' in tackling housing issues.
“Just nine of 22 councils have opted to apply any premium on second homes in the 2022-2023 period, and second homes as a proportion of chargeable dwellings have increased by merely 0.19 per cent over the five years to 2021.
“Despite questions remaining around the need for such interventions, the Welsh Government is forging ahead with profound changes to local tax systems and planning policy without fully understanding the extent of the issue.”