Increased council tax is forcing the sale of holiday rentals, MS says
A conservative member of the Senedd (MS) has claimed Welsh businesses are having their ‘hearts ripped out of them’ as a result of second home council tax hikes.
Conservative representative, Mark Isherwood, has said some businesses are being forced to shut down following the new law that second homes and holiday rentals in Wales have to pay up to 300% of council tax on second homes and holiday rentals.
The rule, which was agreed between the Labour and Plaid Cymru parities, was brought in to try and create more affordable homes for people in the country who are currently struggling with the cost-of-living.
On Thursday Conwy council decided to raise its council tax premium to 100% and the Welsh government defended the decision, arguing the housing market would become more equitable.
In addition, rules on self-catering accommodation being liable for business rates rather than council tax have also been tightened. Under the new legislation properties must now be let for at least 182 days to qualify.
Mark Isherwood, who represents North Wales in the Senedd, said many people who owned these types of accommodation struggled to meet the threshold as homes were let for a mere 70 days.
Mr Isherwood has revealed that he has been in contact with numerous constituents who run legitimate self-catering enterprises, including a couple who have decided to sell their entire property since their holiday rental is attached to their primary residence.
‘They’re heartbroken. They talk about mental health issues, sleeplessness [and] financial consequences,’ Mr Isherwood said. ‘We’re talking about real, indigenous businesses that are central to local tourism economies, potentially having their hearts ripped out of them.’
However, problems have also been faced whilst trying to sell the properties. The conservative MP said a vast amount of people were experiencing difficulties due to concerns from mortgage lenders regarding the effects of these premiums on specific properties. Denbighshire council recently passed a decision to raise the premium on second homes and houses left vacant for extended periods from 50% to 100%.
Commenting on the news, the Welsh government said: ‘Tourism makes an important contribution to the Welsh economy and to Welsh life. We do, though, need to ensure appropriate balance.
‘We believe that everybody has a right to a decent, affordable home to buy or to rent in their own communities so they can live and work locally.
‘The changes to the local tax rules for self-catering accommodation and second homes are designed to help develop a fairer housing market and ensure property owners make a fair contribution to the communities where they own homes or run businesses.’
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Housing supply struggles to keep pace with growth in holiday homes