HOW VALUATION OFFICE AGENCY WILL ASSESS AND ENFORCE NEW RULES ON HOLIDAY HOMES
NEW Welsh Government rules for holiday properties to qualify as businesses come into force next month. The Government is taking action to try to control the number of second homes in the country over concerns that some communities are being saturated with holiday properties.
But many in the tourism sector fear genuine holiday lets will be dragged into paying thousands of pounds in council tax - potentially putting some out of business. Some have called the rules “draconian”.
Holiday lets used as businesses can pay business rates instead of council tax - often meaning paying no tax instead of higher rate bills for second homes in some counties, with the premium at 150% in Gwynedd.
The criteria to qualify as a business are changing from April 1. The current availability threshold will rise from 140 to 252 and the current occupancy threshold go from 70 to 182 days. Local authorities will also have the powers to increase the council tax premium to 300% though none have done that as yet. There are some exceptions but not as many as were called for by tourism groups.
While the rules have been changed by Welsh Government it is the Valuation Office Agency (VOA) that assesses properties in Wales for council tax or business rates, based on whether their primary use is considered domestic or non domestic.
How the VOA properties
will assess
The VOA issues forms called ‘Requests for Information’. The VO6048 form has been designed specifically for selfcatering units and holiday cottages. The information provided on this form is used to check whether the eligibility rules for holiday lets are met. Holiday property owners may be asked to provide supplementary evidence to support their information on the form. This could be the financial accounts for their business, their marketing of the property, or evidence of lettings such as a guest book or calendar bookings.
Checks on the information provided
The VOA has informed holiday let owners of the changes to eligibility rules, through letters, its social media channels and on GOV.UK. The VOA reviews the information provided on the request for information form, and checks this against information that is available to the public about the holiday let – for example, looking up the property’s letting website and confirming that is being let for commercial purposes. The VOA will seek additional information and clarification where needed.
If, after reviewing the form, the additional information suggests the property does not meet the criteria for remaining in the non domestic rating list it will be moved to the council tax list.
Enforcement and penalties
The VOA said: “We want to support our customers to provide the right information. The form requesting information on holiday lets sets out the importance of providing accurate information, within the specified timescales.
“As the new eligibility rules are introduced, we will be focusing on supporting customers to provide the right information, rather than enforcing penalties for noncompliance. But there is a range of compliance options available to the VOA if information isn’t provided within these timescales, including reminders and penalty notices. There is also provision for criminal proceedings for inaccurate information but these would be used very rarely, and as a matter of last resort.”
When new rules apply
Valuation Officers conduct a rolling programme to check properties listed as self-catering properties in the nondomestic rating list meet the eligibility criteria. Properties may also be reassessed for other reasons, for example if there has been a change of circumstances or use.
The VOA said: “The rolling programme means we will write to customers, asking for this information, at different times during the 2023/24 operating year. We will be using a universal date, from which we will assess whether the new eligibility rules have been met, of 01 April 2023.”