MS warns of the impact of Welsh Government Second Home Council Tax proposals on legitimate holiday-let businesses
North Wales MS Mark Isherwood has condemned the impact on legitimate holiday-let businesses of new Welsh Government regulations which will allow local authorities to charge a Council tax premium of up to 300% on second homes in Wales, quoting legitimate North Wales holiday-let business owners who say they will destroy them.
Speaking in yesterday’s meeting of the Welsh Parliament on the Council Tax (Long-term Empty Dwellings and Dwellings Occupied Periodically) (Wales) Regulations 2022, Mr Isherwood told the Finance Minister of the concerns of holiday-let business owners who have contacted him regarding the changes and asked her what Impact Assessments have been carried out of the consequences of these regulations for such businesses.
“To justify its announcement that any self-catering business unable to meet its increase to 182 days let annually will be removed from the Business Rate Register and may have to pay a Council Tax premium of up to 300 per cent, your Government stated that respondents to the consultation ‘representing the wider tourism industry, clearly support a change to the criteria for self-catering accommodation to be classified as non-domestic’ and, even more surprisingly, ‘were of the view that the majority of genuine holiday accommodation businesses would be able to satisfy increased letting thresholds’. Of course, since then, we've heard outcry from the sector across Wales.
“Concerns have been raised with me by actual legitimate holiday-let businesses, and include:
'I have two holiday lets in the garden of our Gwynedd home. We're open all year, are fully booked during peak season, but usually only have weekend/short-break bookings during the quieter months. I fear we will end up bankrupt.'
'The six holiday cottages that we have adjacent to our home have been in business for 25 years’ and ‘If a business such as ours does not meet the 182 days letting, how could council tax be charged on cottages that have planning permission which states that they can never be residential?’
‘Our holiday let property is located 6 metres from our front door. Clearly not a second home and all on the same title deed. We have been trading for the past seven years and have exceeded 182 days let in four out of the seven years.’
“So, we need to know what Impact Assessments the Welsh Government has therefore carried out of the consequences for legitimate holiday-let businesses, businesses that were established, in many cases, in response to calls by Welsh Governments since devolution for them to diversify within the rural economy - businesses that have properties that have never and will never be used as second homes.”
In her response the Finance Minister stated:
“One of the other tools that we will have available to us is the matter of the thresholds for holiday lets. However, that's not what we are debating this afternoon. So, James Evans and Mark Isherwood will have their opportunity to contribute on those regulations in due course. There's currently a technical consultation open for response, so I'm sure that they'll take the opportunity to respond to that technical consultation, which is ongoing currently.”
Speaking afterwards, Mr Isherwood said:
“It was all well and good for her to state that we were debating an increase in maximum council tax premiums on second homes, not the thresholds for holiday lets, but her proposals would condemn large numbers of legitimate Welsh holiday-let businesses to paying these increased council tax premiums, drive many out of business in consequence and therefore further undermine our rural tourism economy.”