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Wales Online
Wales Online
National
Ruth Mosalski

Crackdown on second homes in Wales will begin next April

The first part of a Welsh Government crackdown on second homes in Wales will come into force next April. The change will bring in stricter rules for holiday homes that are exempt from council tax.

Currently any holiday house that is let out for more than 70 days a year – and is available to be let out for more than 140 days a year – can pay business rates instead of council tax. Under the new rules holiday homes will have to be let out for more than 182 days a year and be available for let for upwards of 252 days a year to qualify for the exemption.

The change, which had been proposed as part of the Welsh Government's wider crackdown on second homes, had caused consternation among many owners of holiday lets who feared that it would be impossible for them to let out properties outside of prime areas for more than half the year. Rebecca Evans, the Welsh Government minister for finance and local government, has now said that the change will come into effect on April 1 next year. She said property owners should aim to achieve the criteria this year but it would not be assessed until April 1, 2023.

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However there is criticism that it will lead to a huge number of self-catering operators being unable to do business. The Welsh Conservatives say the announcement is a "devastating blow" and quoted a survey by the Wales Tourism Alliance (WTA) which found that 84% of self-catering operators in Wales believe they won't be able to continue their business if the lettings laws are introduced.

Welsh Conservative spokesman on culture, tourism, and sport Tom Giffard MS said: "These new letting requirements will frankly be impossible for many self-caterers to meet and will decimate the Welsh tourism industry. Labour ministers should be focused on helping the sector bounce back from Covid – not wreck the fragile recovery and put jobs at risk”.

The Welsh Government has been consulting on its plans for second homes. The new plans include an increase to the maximum level of council tax premiums for second homes as well as new local tax rules for holiday lets. The maximum level at which local authorities can set council tax premiums on second homes and long-term empty properties will be increased to 300%, which will be effective from April 2023. You can see those here.

In a statement from finance minister Ms Evans it says: "Following our consultation the Welsh Government is of the view that properties let out as self-catering accommodation on an infrequent basis should be liable for council tax. Increased letting criteria will ensure that self-catering properties are classed as non-domestic only if they are being used for business purposes for the majority of the year.

"I recognise the strength of feeling among self-catering operators and have listened to the representations from individual businesses and industry representative bodies. There is limited evidence available in relation to some of these considerations and I am grateful to the sector for providing additional information they have gathered from their members.

"The Welsh Government recognises that some self-catering properties are restricted by planning conditions preventing permanent occupation as someone’s main residence. The Council Tax (Exceptions to Higher Amounts) (Wales) Regulations 2015 provide for an exception from a council tax premium for properties restricted by a planning condition preventing occupation for a continuous period of at least 28 days in any one‑year period. In light of the changes we are introducing to the letting criteria I am also exploring whether further amendments to these regulations are necessary in advance of the changes taking practical effect. I will also be issuing revised guidance to local authorities on additional options that are available in the event that self-catering properties restricted by planning conditions do not meet the letting criteria."

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