Conwy council has been recommended to charge a 100% premium on second and long-term empty homes from next April.
By Brendon Williams
BBC News
Businesses are having their “hearts ripped out of them” due to increased tax on second homes, an MS has said.
Conservative Mark Isherwood said some were closing after councils were given powers to charge up to a 300% premium on second homes and holiday lets.
Conwy council will decide on Thursday whether to increase its council tax premium to 100%.
The Welsh government said the premiums would help develop “a fairer housing market”.
New legislation means local authorities can charge a premium – an amount on top of council tax – of up to 300%.
The move, included in a Labour-Plaid Cymru cooperation agreement, is part of efforts to make it easier for people to afford homes where they grew up.
Rules on self-catering accommodation being liable for business rates rather than council tax have also been tightened, and properties must now be let for at least 182 days to qualify.
Mr Isherwood, who represents north Wales in the Senedd, said many owners struggled to meet the threshold – previously 70 days – leaving them liable for the higher premiums.
Mark Isherwood said some businesses who want to sell up because of the premiums are unable to.
He said he had been contacted by “huge numbers of constituents” running “legitimate self-catering businesses”. Among them, he said, were a couple whose holiday let is attached to their own home, and they were now selling the whole property.”They’re heartbroken. They talk about mental health issues, sleeplessness, financial consequences,” he said.He added: “We’re talking about real, indigenous businesses that are central to local tourism economies, potentially having their hearts ripped out of them.”
He said some people were were struggling to sell up because mortgage lenders are concerned about the impact of the premiums on certain properties.
Denbighshire council has voted to increase its premium on second homes and long-term empty properties from 50% to 100%.
Carol Smith, who has run Porth Y Dwr cottage in Ruthin, Denbighshire, as a holiday let since 2017 said she and her husband now plan to stop offering holiday lets and rent the property out instead.
Carol Smith, has been running Porth Y Dwr cottage in Ruthin, Denbighshire, as a holiday let since 2017
The couple had bought the property when it was an empty café and turned it into a residential unit.
“We can’t go on if we’re going to be paying increasing premiums,” she said.
“The biggest issue for a lot of people in the area, and us particularly, is achieving 182 days on a regular basis is well-nigh impossible.”
On Thursday, Conwy council is being recommended to charge a 100% premium on second and long-term empty homes from next April.
They are also being urged to recommend an indicative level of premium of 200% on both categories from April 2025.
Council leader Charlie McCoubrey said 40% of the county’s 1,600 second homes were the most affordable housing.
“We need to prioritise our housing stock for local residents,” he said.
He rejected the idea that holiday lets brought more money into the economy than renting a home year round.
Holiday let owner Robin Leatherbarrow, said the 182-night occupation threshold was causing “stress” for businesses
But Robin Leatherbarrow, who has owned a five-bedroom holiday let in Conwy’s Colwyn Bay for four years, said others will be forced to close their businesses or raise prices – risking losing bookings.
Each year his property has been occupied 182 nights a year – so he does not pay council tax but lower business rates – but said he is worried that could change in future.
“It causes an awful lot of stress amongst myself and my fellow proprietors,” he said.
A survey by the Professional Association of Self Caterers found only a quarter of holiday let businesses believed they would reach 182 nights of bookings next year.
The Welsh government said: “Tourism makes an important contribution to the Welsh economy and to Welsh life.
“We do, though, need to ensure appropriate balance.
“We believe that everybody has a right to a decent, affordable home to buy or to rent in their own communities so they can live and work locally.
“The changes to the local tax rules for self-catering accommodation and second homes are designed to help develop a fairer housing market and ensure property owners make a fair contribution to the communities where they own homes or run businesses.”
