Second homes in Wales could face 300% council tax hikes

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

Currently, municipalities can levy a second home premium of up to 100%, but this will increase to 300% from April 2023.

The move, which is part of a collaboration agreement between Labor and Plaid Cymru, is part of an effort to make it easier for people to afford a home where they grew up.

A group of homeowners said the move was “morally unacceptable”.

But Climate Secretary Julie James hit back, arguing it was “the moral right thing to do” to protect communities.

“It’s amazing and morally unjustifiable,” Jonathan Martin, a spokesman for the Home Owners of Wales Group, told BBC Radio Wales Breakfast.

“How do you think we’re going to get that 300%? I can’t afford it, that’s for sure, and I’m pretty sure a lot of other people can’t. It’s just amazing.”

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

“They love Wales, they love the Welsh, they love the Welsh language, they love Welsh culture. That’s why they have a home there,” he added.

Born and raised in Abersoch, Huw Hickey works full time but still struggles to pay his rent.

“I moved to Pwllheli to live because it’s cheaper for me there,” he said.

“There are hardly any Welsh here now.”

Even if a 300% council tax hike were imposed, he believed people from outside the area would still “flock here in droves.”

“Then we’ll be expelled and soon there won’t be any Welsh here.”

Cath Clarke, who owns a caravan near Abersoch, agrees with the Welsh Government’s proposal.

“If people have second homes, the community will die,” she said.

“It needs locals. If people like it that much here, then they should move here.

“I think it’s great that there are so many RV parks because people can vacation there.

“I really dislike second homes the most. It’s an incredibly selfish way of doing things.”

Mr Martin also criticized the post-pandemic timing and amid the rising cost of living, but said his group was ready for a fight.

“I think the biggest threat to the Welsh Government will be that we’ve been told it’s absolutely unlawful,” he added.

“So I don’t know where we’re going, but we need to have a big discussion as a group. We are financially in a position to take on the Welsh Government if they force this on us without further consent.”

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

Welsh ministers are encouraging local councils to use the extra money raised to increase the supply of affordable housing.

The Welsh Government is also set to tighten rules for self-catering accommodation, which will be subject to business tariffs rather than council tax from next year.

At the moment, properties that can be rented for a minimum of 140 days in a 12-month period and are actually rented for a minimum of 70 days are paid installments excluding council tax.

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

The Government said this would make it clearer that the premises are genuine holiday accommodation, making a “significant contribution” to the local economy.

In some parts of Wales, particularly coastal areas, second homes are a contentious issue as people feel they are crowding them out of the area they grew up in and a threat to Welsh-speaking culture.

Meanwhile, second-home owners argue they feel “discriminated against” when buying homes in desirable areas.

Tax premiums will be paid on more than 23,000 properties in Wales this year, according to the Welsh Government Council.

Some apartments are exempt from the premium – such as those needed for employees.

In the 2022-23 tax year, nine authorities will levy 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 eligible for a premium, at 3,746 and 3,794 respectively.

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

Speaking to Radio Wales Breakfast, Josh Phillips, chairman of Solva Community Land Trust in Pembrokeshire, said the move was positive for rural communities but warned a balance had to be struck.

“I think if we start talking about moral outcomes here, we’re going to put ourselves in a bit of a difficult situation, because what is the moral authority of these people to subvert our communities in this way and destroy our local culture?

“What we can’t have is that these premiums go up to 300% and scare off these people who play an important part in our local economy.

“So I think there’s a lot of loud voices out there right now, and I think we need to stop and think about where that bounty sits and how we’re using it to best serve our local people.”

In response to Mr Martin’s comments, Ms James told Radio Wales Breakfast: “This is someone who is fortunate enough to be wealthy enough to own a second home, who is opposed to contributing to the community, where he would like to come and vacation .

“Obviously the Welsh Government is very clear that we have the legal right to do this and indeed it is the moral right thing to do.”

She added: “This is about ensuring that people who are fortunate enough to own second homes make a fair contribution to the communities they come to and choose to holiday in.

“We also encourage people to rent out their homes in the private rental sector for long-term rents to people who are residents.”

Plaid Cymru’s Sian Gwenllian said: “It’s a first but important step towards a new housing system that will ensure people have the right to live in their community.”

The Conservatives accused the ministers of “punishing endeavor and investment”.

Janet Finch-Saunders, speaking for the Welsh Conservatives on housing, accused Labor ministers of “giving in to their nationalist coalition partners and punishing aspirations and investment in Wales”.

“The housing crisis is a direct result of years of consecutive Labor-led governments that have failed to create opportunity and build enough homes, with housing construction falling below pre-decentralization levels.”

Gwynedd City Council said it welcomes action to address second homes to help people buy homes in their communities.

“It is critical that all homes are taken out of the commercial tariff system so that they pay council tax and any premiums,” a spokesman said.