Council tax premiums on second homes in Wales raise £17M

WALES’ housing minister told the Senedd increased council tax premiums have raised £17m amid concerns communities have been “disembowelled” by high numbers of second homes.

Julie James said local authorities have been able to introduce higher council tax premiums, beyond the previous 100% limit, on second homes and empty properties since April 2023.

She told the chamber 18 of Wales’ 22 councils will be applying premiums on either or both types of property from April this year, with a further two councils to follow by 2025.

Ms James said more than £17m additional revenue was raised by councils in 2022-23 to be invested in public services, including addressing homelessness and social housing.

She pointed to other affordable housing measures jointly agreed between the Welsh Government and Plaid Cymru, including plans to register all visitor accommodation.

Ms James highlighted the Dwyfor pilot and Gwynedd Council’s consultation on increased planning powers to tackle the impact of second homes and short-term holiday lets.

‘Disembowelled’

Mabon ap Gwynfor raised concerns about second homes pushing up property prices and undoing the social fabric of communities by forcing families to move.

“Many communities have been disembowelled by the numbers of second homes,” he said.

Plaid Cymru’s shadow housing minister welcomed latest statistics showing the number of second homes is expected to fall 9% from 24,000 in the 12 months from April.

He said Gwynedd Council raised £9m through council tax premiums in 2023-24, with £6m allocated to an action plan to provide homes for young people and £3m for homelessness.

The Dwyfor Meirionnydd MS called for a significant expansion in the availability of social housing, according to local need across Wales.

He described the Welsh Government’s aim of building 20,000 social homes by 2026 as far from adequate, warning that ministers will not hit the target at the current rate of progress.

‘Not a panacea’

Janet Finch-Saunders, who declared an interest due to property ownership, stressed that targeting second-home owners is not a panacea.

The Conservatives’ shadow minister said: “The homelessness now seen in Wales is a national embarrassment. Affordable homes, for many, are a major problem.

“However, the targeting of short-term holiday lets and second home owners is not the panacea … because, like it or not, they do contribute towards our local economy.”

Ms Finch-Saunders called for the Welsh Government to clamp down on the long-term “scourge” of empty homes by urging councils to use compulsory purchase powers.

The Aberconwy MS raised concerns about probate, saying it often takes two years, with Ms James agreeing but accusing the UK Government of under-funding the system.

‘Virtuous circle’

During the statement on March 12, Ms James stressed that if you are lucky enough to own more than one house, then you should be able to pay a bit more.

She said: “It means there is more housing stock for local people, who need to work and live locally, to work in the tourist industries that are bringing those people there in the first place.

“This is a virtuous circle and not a vicious one.”

Mike Hedges, a Labour backbencher who represents Swansea East, welcomed higher council tax premiums on second homes and long-term empty properties.

“I’ve just discovered it’s now being copied in England,” he said. “So, I think that people may well have to change what they have said up till now.”

Mr Hedges called for legislation to tackle the growth of short-term lets, such as Airbnb, warning: “That really is the big problem that is going to have to be addressed.”

Ms James said plans for a licensing and registration scheme aim to level the playing field.