More lets exempt from second home council tax

THE Welsh Government has proposed that more categories of properties will be exempt from paying the council tax premium on second homes.

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.

Holiday lets used as businesses can pay business rates instead of council tax – often meaning paying no tax instead of potentially thousands of pounds through the higher rate bills for second homes in some counties.

But the criteria to qualify as a business is changing from April 1 next year.

The current availability threshold will rise from 140 to 252 and the current occupancy threshold will go from 70 to 182 days. Local authorities will also have the powers to increase the council tax premium to 300% (currently 100%).

The Wales Tourism Alliance (WTA) warned it will push many holiday let owners out of business, saying: “Like dolphins accidentally caught in fishing nets, these businesses will die”.

They appealed for a raft of exemptions to the rules to protect genuine businesses.

The WTA says the new rules could particularly impact areas that aren’t tourism hotspots and could struggle to reach the new criteria.

The Welsh Government has now added in some changes which will prevent some holiday lets from being hit with large tax premiums – although this falls well short of what was being demanded.

The three exceptions apply where planning conditions are in place, that:

■ 1. Prevent occupancy for a continuous period of at least 28 days in any one year period.

■ 2. Specify that the dwelling may be used for short term holiday let only.

■ 3. Prevent occupancy as a person’s sole or main residence.

There will also be additional guidance on the discretion local authorities will have in the application of the premiums.

It follows ongoing discussion and engagement with councils, communities and the tourism industry.

Finance and Local Government Minister Rebecca Evans said: “I recognise the strength of feeling among self-catering operators in response to the changes to the letting criteria, and I have listened to the representations from individual businesses and industry representative bodies.

“These changes will give more flexibility to local authorities and will ensure that the contribution property owners make to the communities where they have homes or run businesses is fair.”