New powers have been revealed to tackle what the Welsh Government calls the ‘problem’ of second homes.
A statement from the Senedd says: “The rules have become operational following national and local consultations, meaning that local authorities are now able to put their strengthened levers into practical effect. Measures are part of efforts to ensure everyone has the chance to live in their local community and to improve the availability and affordability of housing to rent and to buy for those on local incomes.”
Local authorities are now able to set and collect council tax premiums on second homes and long-term empty properties at up to 300 per cent – up from 100 per cent – with councils able to decide levels based on their local needs.
Five local councils in Wales have already increased the premium charged for second homes in 2023-24, with another seven set to introduce one from April 2024.
Three councils have increased the long-term empty property premium in 2023-24, with another four introducing one for the first time, and another two planning to introduce one in April 2024.
The criteria for holiday lets being liable for non-domestic rates instead of council tax have also been strengthened, with the government saying this has ”the intention of providing a clearer demonstration that properties are being let regularly as part of genuine holiday accommodation businesses making a substantial contribution to the local economy.”
Rebecca Evans, minister for finance and local government, says: “The changes to the local tax system form one strand of a wider package of measures being introduced – encompassing the planning, property and taxation systems – to address the impact of second homes and unaffordable housing affecting many communities in Wales. Ultimately, these changes are about fairness. We want to ensure councils have the powers available to them to strike the right balance in local housing supply.”
New planning use classes and the ability of local authorities to make local amendments to the planning system, where they have evidence, are now in force.
Proposals for a new statutory licensing scheme for visitor accommodation providers were published for consultation before Christmas, while up to £60m is being allocated to bring empty homes into use as part of a national Empty Homes Scheme.
The Welsh Government’s commitment to enable increased land transaction tax to be raised on second homes and short term holiday let purchases is also being taken forward, as well as specific action to protect Welsh speaking communities including a voluntary ‘fair chance scheme’ giving sellers the option to only market properties locally for a fixed period.
Work is also being progressed on a Property and Fair Rents White Paper.