‘Don’t allow second home owners to avoid paying council tax’

DELEGATES at the Plaid Cymru conference have called for the closing of a legal loophole that allows second home owners to avoid paying council tax.

Arfon AM Sian Gwenllian said it was scandalous that wealthy people able to afford a second home were able to avoid the tax by claiming it was a holiday business.

An increasing number of second home owners in Wales are using a legal anomaly that allows them to avoid paying council tax or business rates, meaning they pay no money whatsoever into the public purse.

There are, for example, 5,000 second homes in Gwynedd that are not holiday businesses, but by registering as small businesses their owners can avoid paying council tax by claiming that the home is available for let for up to 140 days a year, and therefore a business.

The lack of effective monitoring means that it is entirely possible for owners to ignore this clause, meaning that they pay no council tax on their second home. They make a further saving on business rates under the Welsh Government Relief Scheme which is available for small businesses, meaning that they pay no tax and no rates either.

Ms Gwenllian said: “Holiday homes drive up house prices, making buying a home in many areas unaffordable for young people. Gwynedd Council have used discretionary powers to allow them to ask for 50% more council tax from second home owners, the idea being to create a pot of money to build affordable homes. But many second home owners have found a loophole in the system which means they end up paying no tax at all. Surely this can’t be right?

“I have been putting pressure on the Labour Welsh Government to remedy this and will continue to do so.

“Plaid Cymru would make changes so that planning permission to turn second homes to holiday homes, and planning permission is needed to turn a dwelling into a second home.

“Gwynedd’s innovative policy meaning only housing that meets local need is given planning permission. Local Housing Market should be rolled out across communities suffering high house prices due to second home ownership.

“These policies and others designed to create viable communities are contained in Plaid Cymru’s new proposals.”