‘Cap the numbers and close the loopholes’
AS SECOND HOMES MAKE UP BIG SLICE OF PROPERTY PURCHASES IN GWYNEDD, AND £2M GOES BEGGING FROM COUNCIL TAX COFFERS, SOLUTIONS ARE SOUGHT
ANY local measures without national legislation to solve the second-homes crisis would be “a sticking plaster over a gaping wound,” with suggestions that planning and a capping system could be used to protect communities from rocketing house prices.
Figures published by the Welsh Revenue Authority show how more second homes have been bought in Gwynedd than anywhere else in Wales in the past year – possibly as much as 38% of all the county’s property sales between March 2019 and April 2020.
Craig ab Iago, the housing portfolio holder for Gwynedd Council, has been a critic of the lack of measures available for authorities to stem the flow, with decision-makers having previously expressed frustration at the ability of their owners to transfer from council tax to business tax rates, meaning they can potentially avoid paying anything to the council.
Despite implementing a 50% tax premium on such properties, Gwynedd Council believes it is missing out on £2m a year as a result of the loophole, with more than 1,250 homes having “flipped” in the past five years.
While any holiday homes registered as businesses should theoretically pay business rates, they do not have to pay council tax as long as they are available to let for 140 days a year and are actually let for at least 70.
The Welsh Government says it is on target to deliver 20,000 additional affordable homes by the end of the current term, stressing its aware of the pressures second homes place on the housing market.
But Cllr ab Iago has described the situation as “rubbing salt on the wound”, with recent Gwynedd data showing an additional 811 houses a year are required to meet local demand, but with 830 properties “lost” as second homes it was creating a shortfall of 1,641 homes each year.
“The issue has become more pronounced over recent years,” he said. “It doesn’t matter how many homes we can build ... until we sort out the root issue, we’re putting a sticking plaster over a gaping wound.
“There’s a clear will to do something here, as we know that if we don’t, there won’t be Welsh-speaking communities. Our way of life will be displaced by rows of empty homes with the lights off during the winter. I don’t think that anyone really wants that.”
Arfon MS Sian Gwenllian said the Covid-19 pandemic had highlighted tensions that “had always been in existence”, noting the extremes of those able to afford a second home while others couldn’t even think of buying a house.
She added: “It’s clear to me the political will isn’t there by the Welsh Government ... as socialists they should be tackling this inequality. It’s very frustrating. We need to stop this nonsense of people not paying council tax by registering themselves as businesses; that would be easy to solve.”
The Welsh Government has consistently argued there is specific letting criteria which owners must meet for their property to be treated as self-catering accommodation.
A spokesman added: “The law in Wales makes a clear distinction between properties used as second homes and those used as self-catering accommodation.
“Second homes are liable for council tax.
“Properties which meet the letting criteria for self-catering accommodation are listed for non-domestic rates and are treated as businesses for local tax purposes.
“We have invited local authorities to provide information on any cases where they believe properties are incorrectly listed.”