Second home owners are already offloading their properties following changes to how long they must be rented out for in order to avoid council tax. Adrian Stanley, from Derbyshire but with a second home in Pembroke, has just put his property on the market after 17 years of ownership because of changes by the Welsh Government.
Under current Welsh Government rules properties can be rented out for 70 days to qualify for small business relief and therefore avoid the council tax premium attached to second homes. But from next April, the threshold has been raised to 182 days, meaning many second home owners are facing the prospect of paying thousands of pounds more. And with many councils looking to clamp down on second homes in their areas, many are likely to introduce a 300% uplift to council tax for those who have more than one home.
Mr Stanley, who spends around a third of his time in Pembrokeshire and also lets out his property for 12 weeks every year through Powells in Saundersfoot, said: "Basically I don't think I've got any other option. The Welsh Government is being short sighted."
He won't meet the 182-day threshold and is looking at a council tax bill at least doubled, if not tripled. "To have to pay double all of a sudden, it's just not something I want to do," he said. "I do think it's very sad."
Renting out second homes for 182 days is "totally unachievable" in Pembrokeshire, Mr Stanley continued. He said: "The predominant reason people go to Pembrokeshire is for beach holidays in the summer. It might be feasible to meet 182 days in the hotspots like Tenby and Saundersfoot, but not elsewhere in Pembrokeshire."
The retired aerospace engineer, aged 56, has holidayed in Pembrokeshire every year of his life. "It's totally inaccurate when people say second home owners only use their property a few weeks of the year, I know plenty who spend a significant amount of time visiting their second homes," he said. "I'd be quite happy to pay my way in council tax, but not at 300%."
Second home owners undoubtedly contribute to the local economy according to Mr Stanley. He added: "For me the Welsh Government should be promoting a more inclusive environment. Keep second home owners in Pembrokeshire spending money. However encourage all of them to let their properties to holiday makers each year to generate tourism in Pembrokeshire, but for a more achievable amount of days per year and definitely not 182."
"I won't be venturing back to Wales," he said. "I've never felt so unwelcome."
Mr Stanley's property is on the market with West Wales Properties inviting offers over £270,000. The estate agency said there had been a marked increase in the number of properties coming onto the market which had previously been used as second homes. In the same vein, there are also fewer prospective second home buyers than have been seen previously.
One of their agents said: "We are seeing more homes coming to market and a number of individuals who are anxious about meeting the threshold. We are also seeing a lot fewer buyers wanting second homes." Although they are still getting enquiries about second homes, it's notably "less now than it has been".
Those buyers are a mix of those from away as well as people living locally with more than one home, according to West Wales. And those who are just about meeting the threshold now are finding it "too worrying" to continue and risk the extra bills in the future.
The new rules are "decimating" Welsh businesses while others - including Mr Stanley - don't believe the new measures will solve the problem of affordable housing for locals and first time buyers.
While many properties met the 182 threshold last year, in part due to the unusual demand created by the Covid pandemic, this is likely to slow as people return to their usual habits of holidaying abroad. It's left some staring at an impossible task, with one home owner from Snowdonia saying there is "no way" he can meet the new threshold. Writing to Jim Jones, CEO of North Wales Tourism Ltd, he said: "This last year I had not one single booking from Oct to March, including Oct half term." His property - priced beyond the reach of locals - was snapped up by a barrister from Hampshire, he said.
Mr Stanley thinks the answer is to build more affordable housing, something he thinks is more obviously happening back in Derbyshire but is virtually non-existent in Wales. He said: "I know housing is short but in Derby it's blatant to see houses are being built and something is being done about it. But we just don't see that in Pembrokeshire. In the short term, I think the changes will release housing into the market but in the long term it won't address the problem."
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