ARTICLESecond Homes Taxes will backfire on wider economy - warning

News at John Francis | 17/03/2022

A rural body in Wales has hit out at the Welsh Government’s proposals for draconian new taxes on second homes. Earlier this month the Welsh Government increase the maximum level at which local authorities can set council tax premiums on second homes and long-term empty properties 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. 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. These radical changes have been slammed by the Welsh division of the countryside body, the CLA. “No evidence has been presented that targeting the tourism sector will increase the affordable housing stock, or that funds raised by councils will be committed to residential building” explains Nigel Hollett, CLA Cymru director. “The solution is to improve the planning system to enable the building of more homes, to release suitable land for sustainable development and to encourage the conversion of suitable buildings - from large-scale urban retail sites - to rural barns and former business premises” he continues. “Equally, government policy to require ever-demanding Energy Performance Certificates from traditionally-built, rural rented properties – is exacerbating the affordable housing crisis, as many private rented properties become unviable and are inevitably sold – probably into the second homes market. “The rural tourism industry is still to recover to pre-pandemic levels. Many who manage self-catering holiday accommodation see this - and more proposals to come - and see that the Welsh Government has no intention to sustain a level playing field for our tourism sector with other parts of the UK.” And he concludes: “The big picture is that the Welsh Government’s proposals will lead to a reduction in capacity for visitors to Wales – meaning reducing the tourist-pound spent in attractions, pubs, restaurants and shops.”