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

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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