The Wales Tourism Alliance (WTA), which represents over 6,000 Welsh tourism businesses, has reacted with “incredulity” to the Welsh Government’s announcement on changes to self-catering rules.
As part of its commitment to tackling the issue of too many second homes in some Welsh communities, Welsh Government is raising the number of days a property is available and let in order to qualify as a business.
The current availability threshold rises from 140 to 252 and the current occupancy threshold rises from 70 to 182 days. Those who don’t meet that minimum will pay council tax rather than business rates - with local authorities given the powers to bring in a second home premium of up to 300% on these properties.
The WTA warned that "Like dolphins accidentally caught in fishing nets, these businesses will die".
A consultation was launched by the government and was initially welcomed by the professional self-catering sector, keen to distinguish tourism businesses from second homes which offer casual lets.
Despite the consultation finding widespread concern over increasing stay levels to 182 - and compromise alternatives offered - the Government has ploughed on with the plans. The WTA said it found only 16% of respondents could meet the 182 day criteria.
Suzy Davies, chair of the WTA said: “Welsh Government says it has ‘limited evidence’, So why are they making policy on the back of it? The limitation is their own, not the industry’s. They have not produced a shred of evidence as to why this won’t impact local economies.
“Conversely, it is rare that Welsh Government will receive this much first-hand evidence of the impact of a policy by those affected. We received several reassurances that these real experiences would be taken into account. These are not the experiences of second home owners:
“These are the experiences of local people who have invested in micro and small businesses and have been contributing to the local economy, often for many years.
“It may well stop second home owners claiming they are businesses in order to game the local taxation system. We also want that stopped. But in setting these thresholds so high, Welsh Government will be taking out local businesses too.
“These are the professional businesses who, however innovative they are, cannot create summer-style demand throughout the year.
“The threat is especially acute in counties which have adopted premium rates of council tax on second homes.
“If businesses are re-categorised as second homes because they don’t reach the new thresholds (they’d earn more if they did) they will also have to pay the higher council tax, double punishment.
“Like dolphins accidentally caught in fishing nets, these businesses will die. The irony is that they will be selling their properties to wealthier outsiders who can afford high council tax.
“So, fewer local businesses, more second homes, zero effect on local housing stock and zero effect on house prices. MS’s supporting this policy may want to think about what they will say to constituents who can’t find professional self-catering properties for a holiday, and end up paying second home owners for a casual let instead. And what they will say to constituents who will still not be able to afford a home, not least because this policy takes out local jobs too.”
Finance minister MS Rebecca Evans said: “Respondents were of the view that the majority of genuine holiday accommodation businesses would be able to satisfy increased letting thresholds, and a wide range of possible alternatives was suggested. Increasing the thresholds will provide a clearer demonstration that the properties concerned are being let regularly and are making a substantial contribution to the local economy.”
