Second homeowners in Wales face high tax bills from council after business plan deal

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Second home owners in Wales could soon see their council tax bills rise after Labor signed a new deal with Welsh nationalists.

On Monday, the Labor-led Welsh government announced a cooperation agreement with Plaid Cymru to overcome it being seated below the Senedd’s overall majority.

Although both parties insist the deal does not signify a formal alliance, they have drawn up a political platform covering a range of areas including crackdowns on second home ownership in Wales.

The Welsh government has said second home ownership has reached ‘crisis’ levels, with rising house prices meaning a growing segment of society, mostly younger generations, cannot afford to live in their local communities.

A document from Labor and Blade Cemrow, which sets their agreement for three years, said they would “take immediate and drastic action to tackle the proliferation of second homes and unaffordable housing, using planning, property and tax systems”.

“Actions being planned include capping the number of second homes and vacation homes; measures to bring more homes into joint ownership; a legal licensing system for vacation vacations; and greater powers for local authorities to levy council tax premiums and raise taxes on second homes,” she said.

A similar approach is proposed in Northumberland

He didn’t provide further details on the nature of the tax proposals, but Plaid Cymru had previously projected exorbitant fees for second home owners.

The party’s statement said it would allow local authorities to “impose council tax premiums of up to 200 percent on second homes” and plug a loophole that allows second home owners to avoid the premiums by registering their property as a business.

Welsh councils have the right to impose a council tax premium of up to 100 per cent on second homes since 2017.

A proposal to cap the number of second homes in Wales could prevent English buyers from investing in the housing market if they do not live locally.

A similar approach has been proposed in Northumberland, where the county council has proposed banning the sale of homes to buyers who do not live in an area if more than 20 percent of homes there are identified as “without ordinary residents” in the census. Measures to limit second home ownership have also been introduced in parts of Cornwall and Devon.

Welsh Conservatives had previously said the plans to hit second-home owners with higher council tax burdens were a “hidden attack” on the visitor’s economy.

Official figures earlier this year showed that 24,873 second homes were registered in Wales for council tax purposes. Gwynedd had the highest number at 5,098, which represents about 20 percent of all second homes in the country.

Swansea Council became the first Council in Wales to charge a full 100 per cent premium from 1 April, and Gwynedd Council has followed since then.

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