Posted: Sat 1st Apr 2023

Wales introduces new tax rules to tackle second home ownership and empty properties

News and Info from Deeside, Flintshire, North Wales
This article is old - Published: Saturday, Apr 1st, 2023

Welsh communities are set to benefit from new local tax rules aimed at addressing the impact of second home ownership and empty properties. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The rules, which came into force today, form part of the Welsh Government’s Co-operation Agreement with Plaid Cymru. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Local authorities can now set and collect council tax premiums on second homes and long-term empty properties at up to 300%, a significant increase from the previous 100%. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

This change allows councils to determine levels based on local needs. Five councils have already increased the premium charged for second homes in 2023-24, with another seven planning to introduce one from April 2024. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Three councils have increased the long-term empty property premium, with four more introducing one for the first time, and another two planning to implement one in April 2024. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The criteria for holiday lets being liable for non-domestic rates instead of council tax have also been tightened to ensure that properties are being let regularly as part of genuine holiday accommodation businesses contributing to the local economy. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Rebecca Evans, Minister for Finance and Local Government, stated that these changes are about fairness and ensuring councils have the powers to strike the right balance in local housing supply. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Sian Gwenllian MS, Designated Member, echoed this sentiment, emphasising the importance of fairness for local people and those on lower incomes. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

In addition to the tax changes, new planning use classes have been implemented, giving local authorities the ability to make local amendments to the planning system. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Proposals for a new statutory licensing scheme for visitor accommodation providers have also been published for consultation, and up to £60 million has been allocated to bring empty homes into use as part of a national Empty Homes Scheme. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The commitment to enable increased land transaction tax on second homes and short-term holiday let purchases is also being taken forward, along with specific actions to protect Welsh-speaking communities. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Julie James, Minister for Climate Change, stressed that the challenges caused by high levels of second home and short-term let ownership are complex, but the wide range of measures introduced reflect the government’s commitment to helping people live affordably in their local communities. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

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