FHL Council Tax Exemptions - Extracted from queries to Welsh Government Officers (26/05/22)

The Council Tax (Exceptions to Higher Amounts) (Wales) Regulations 2015 provide for the existing 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. That’s the current extent of the planning-related exception.The current exemption for council tax premiums for properties with planning constraints is set out in legislation and applies on a pan-Wales basis. This is known as a class 6 exemption and should already be applied by local authorities.

Full guidance on the application of the exemptions and operation of council tax premiums can be found at: https://gov.wales/sites/default/files/publications/2019-06/council-tax-on-empty-and-second-homes.pdf#:~:text=From%201%20April%202017%2C%20local%20authorities%20will%20be,decision%20to%20be%20made%20by%20each%20local%20authority .

Guidance on the Implementation of the Council Tax Premiums on Long-Term Empty Homes and Second Homes in Wales states:

Class 6: Exception for Seasonal homes where year-round occupation is prohibited 40.This exception applies to the second homes premium. It is applicable to dwellings that are subject to planning conditions that prevent occupancy for a continuous period of at least 28 days in any 12-month period. 41.This exception is intended to cover purpose-built holiday homes or chalets which are subject to planning conditions restricting year-round occupancy. The exception is based on the definition of the existing discretionary discount for seasonal homes (Class A) in The Council Tax (Prescribed Classes of Dwellings) (Wales) Regulations 19981 .
WG are exploring whether amendments to these regulations are necessary, to account for other types of planning condition preventing permanent occupation. WTA, PASC and UKH are writing to Ministers requesting various exceptions as raised in Industry meetings.
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A revised version of the guidance will be published prior to 1 April 2023 to align with changes to the maximum level of premium and provide further clarity.
Any property, whether restricted by planning conditions, that does not meet the thresholds will be classified as domestic and become liable for council tax. Whether this is the standard rate only will be dependent on the individual circumstances of the property, including whether an exception applies.
 
The changes will take effect from 1 April 2023, with the Valuation Office Agency using the new criteria to assess properties from that date onwards. Any property assessed from 1 April 2023 onwards will be required to evidence 182 days actually let within the 12 months prior to the date of assessment.
Finally, the Welsh Government are considering the extent to which the current class 6 exemptions are appropriate. It should be noted that any changes in this area would be to widen the exceptions from a council tax premium, not to remove any. It is intended that any such considerations be carried out and, if required, legislation be in place for 1 April 2023.