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Backfired! Councils LOSE money through second home tax premiums - claim

A politician is claiming that second home council tax premiums, where owners pay up to double the normal rate, is resulting in financial losses to local authorities.

Janet Finch-Saunders, Member of the Welsh Parliament for Aberconwy, submitted freedom of information requests asking, in relation to the council tax premium on second homes, for the financial losses from property owners switching from council tax to business rates.

She says several authorities have reported losses.

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Ceredigion has seen a financial loss of £1m since 2016/17; Conwy has seen a financial loss of £1.8m since 2012/13; Pembrokeshire has seen a financial loss £3.6m of since 2019/20.In a statement on her website, Finch-Saunders says the figures would be higher if it was assumed that the properties switching from second homes to business rates in one financial year, remained qualified for business rates in the following financial years.

Commenting on the impact of the second home premium, she says: “The evidence from West Wales is clear that the second home premium is failing in its claimed aim of delivering more homes for people to live in.

“Authorities such as Conwy, Ceredigion, and Pembrokeshire are seeing high numbers of properties switching to qualify for business rates, rather than pay normal council tax, let alone the premium.

“At a time when local authorities across Wales are struggling financially, it is a major failure of Welsh Government that they have developed a second home policy for local authorities to implement that results in major financial losses.

“I do not doubt that there would now be more properties paying council tax, and money coming in to local authorities, should the second home premiums not have been introduced”.

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  • icon

    Why are politicians and their advisors too stupid to even think about the unintended consequences of their actions?
    Surely it should be blindingly obvious people will adopt other perfectly legal ways of operating when taxes are increased in an especially punitive way.

    Wouldn't it make more sense for every property to pay standard Council Tax? If the occupants are entitled to a discount it should be claimed as a rebate.
    Tourists staying in Airbnb are going to create rubbish. Isn't it much easier for those properties to pay standard Council Tax and have the bins emptied? They're not using many other of the services Council Tax covers.
    The student grant could be increased by £400 per person to go towards their Council Tax. Why exactly do international students who are paying ridiculous amounts for their degrees qualify for a Council Tax exemption?

  • George Dawes

    Of course they do , they don’t care

    Its your hard earned money that they’re wasting !

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    I have an elderly relative in Wales selling his home there because of the council tax premium. He is Welsh (his wife is English) and he always felt happy when he had his home in Wales.

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    I am surprised at this because the talk on self catering groups is very much along the lines of how difficult it is to get the 180 nights booked that is required to get on to small business rates.
    In any case, these are not all "second homes" but actual businesses that contribute to local rural economies. Some of which would not qualify as residential accommodation due to planning restrictions anyway. Actual second homes would not qualify for business rates.
    Yet another example of politicians commenting on things they do not know about.

  • Sarah Fox-Moore

    The Politics of envy does not care that it hurts itself or others, so long as it hurts its intended target first.

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    Smoke 💨 & 🪞 Mirrors, they are gas lighting to avoid the uncomfortable truth that they have FAILED miserably to build social housing.

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    I have one rental property where council tax was paid by me until the poll tax came in the late 80s. From then until until 2012 no council tax was ever paid because of student tenants, tenants on benefits etc etc . In 2012 my lovely Polish tenant moved in and pays the tax. This is crazy especially as some previous tenants left owing the tax. I live on a road where the majority of houses pay no tax …. We all seem to have rubbish bins to be removed each week. To be fair I get 25 % off as a single occupier. The tax should be on the house …. It can’t run away if it owes tax.

  • icon

    Gov’s that ‘mess with the market’ always get burnt! As the dummies in Wales are finding out!

  • jeremy clarke

    Nothing new then just more evidence that politicians of all sides couldn't organise a p*** up in a brewery even if someone else was paying for it!

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