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Tax Threat to Holiday Lets - three investigations under way

Three projects are underway investigating how a tourist tax, including a levy on holiday let renters, could apply in Wales.

The three probes - triggered by the Welsh Government, which is run by a partnership between Labour and the Welsh nationalist party Plaid Cymru - are to look at the economic impacts of such a tax, how other countries tax tourists, and the demographics of housing provision in Wales.

These are likely to report back to the Welsh Government in late summer, with a consultation on possible measures later in the year.


Rebecca Evans, Wales’ minister for finance and local government, says: “Visitor levies are a common feature in tourist destinations internationally. They are an opportunity for visitors to make an investment in local infrastructure and services, which in turn make tourism a success. Without such a levy, local communities face an undue burden to fund local services and provisions on which tourists rely."

Wales’ First Minister, Mark Drakeford, has already said that he believes a tourism tax - which could be applied to those renting a traditional holiday let or a short let property - can help ease the burden on local ratepayers who underwrite many services and facilities that visitors enjoy.

Anti-second home and anti-Airbnb sentiment continues to build in Wales.

A recent report to the local authority in Denbighshire, for example, showed that growing numbers of homes are now holiday properties.  

A council spokesperson says: “Looking at these properties that are being used in summer, of course, and empty during the winter – and we are losing revenue as well from this – it concerns me that we have got so many people homeless in Denbighshire that we can’t use these properties. A lot of young people are not able to get on the housing ladder due to this, and we are losing a lot. They are moving away.”

He continues: “This issue is very important for many areas in Wales on many levels, the economy, the effect on everything, the Welsh language and also in rural areas.”

Under new rules announced last week, there will be three new classes of property in the Welsh planning system: a primary home, second home and short-term holiday accommodation.

Councils will then be able to make amendments to the planning system to require planning permission for change of use from one class to another.

There are also powers to be given to councils to apply for higher Land Transaction Tax (the Welsh version of stamp duty) on second homes and short lets.

It has already been agreed that Welsh councils can charge up to a 300 per cent premium on council tax on homes that aren’t occupied all year round 

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    I got hit for 50% extra council tax in Conwy on a property which needed a refurbishment just before covid. The lockdown came in just as work started so the refurb had to be abandoned. Finally after 2 years we are free of this rip off and the property is sold. 1 less rental property and no chance of converting it to a holiday property. Feel sorry for the renters as there is not much left for rent in the area now. Sold 2 last year 1 this year and another will be sold next year. Bye Bye Wales.

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    I must say the Gov’ / Council’s plan to drive out Private Landlords is proving very successful.
    Just weight us down with so many rules, regulation’s, endless checking all invented extra unpaid administration, expensive requirements, class all damages as wear & tare, removal of all rights to make sure we are dysfunctional and have to leave.

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    The Welsh Govt doesn't seem to want accommodation for tourists to be available. When they have driven out all the owners of holiday lets & air bnb properties they will no doubt complain about how low visitor numbers are responsible for the lack of jobs & communities dying!

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    Tourists bring a massive amount of money into Wales already. This is simply a way of scamming more money out of the hard working public for the Welsh government to waste on another pointless projects.

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    • G W
    • 14 July 2022 08:08 AM

    There’s no doubt that there are too many air bnb type accommodation, but you can’t blame property owners due to the restrictions and loss of control for standard tenancies……. I’m seriously looking at selling up also because I can’t see the pendulum returning to common sense in a while….. but I’m more fearful of the back bench murmurs to dissuade landlords selling through increased CGT and or offering tenant ability to buy at 20% discount!!!…. Sound mad?…. I thought scrapping Section 21 madness

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    There is always tax free Cornwall just around the corner. Be careful what you wish for

    • G W
    • 14 July 2022 08:55 AM

    Tax free for now…. I have a property rented out on AST and follow many blogs and pressure is growing to change it. It’s always the few who abuse system that spoil it for the many

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    GW - Totally agree, I cannot see common sense returning anytime soon, we know the conservatives are the new Labour… but I too fear Labour getting in, then we are all in the mire. They see the PRS as an extension of the public system.

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    Wales is inviting the whole world to come to Wales and using the housing shortfall created to Brit Bash!

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    Tax on private homes needs to reflect what the people can afford. Many occupants of properties in these areas are on low incomes. Holiday lets are a business and a lucrative one at that. As such they should pay a different rate and one based on business taxes. People who own properties these areas for financial gain should button up. They do not merit same deal on council tax as the people who cut hedges for a living.


    You raise some good points worth discussion and I agree with you to an extent Echis. I have some short let’s in my portfolio that I converted purely as a consequence of section 24. I see no problem paying business rates on the same terms as any other business. These moves are partly to stop second home owners from claiming zero rates when they are only letting their properties out for a few weeks a year so again a fair proposition to stop that. I will be largely unaffected as all my properties achieve 70% plus occupancy because I run them as proper businesses. Ref them being lucrative they can be but people shouldn’t start making assumptions like they have and do about BTL’s and all you need to do is buy a property, convert it to a short let and then back the truck up ready for the cash to be poured in. It’s hard work to do it right and isn’t always as lucrative as you might think and carries many risks. Regarding your point about the hedge cutter shouid pay less than anyone else I find a little confusing. If the hedge cutter lives in a property that reflects their income then they will already be paying less. However if they live in a large expensive house and are struggling to afford the council tax they should perhaps reconsider where they live. There are lots of examples where the thinking around property just isn’t joined up. Example; my 92 year old mother lives in a large 4 bedroom detached house on her own where she has lived all her life. . The house could accommodate a nice family and what’s more the extensive plot could be developed into further houses. But instead she lives there alone leading to more pressure being put on local housing and her reward for doing so is a 25% discount on her council tax. I’m not saying she shouldn’t be allowed to stay in her family home but if she chooses to do that she should be prepared to pay more for the privilege not less. We have a taxation system that reflects peoples incomes, admittedly perhaps not enough, but people make choices in life regarding how they spend the money they are left with and society should not be asked to compensate people for those choices. One final point … more taxation on holiday let’s will not encourage me to go back to BTL which is where the real pinch point is … but the removal of section 24 and starting to recognise BTL as a legitimate business would.


    Echis R

    You betray a woeful lack of knowledge on basic economics and current property tax treatments.

    Firstly, Market Forces already largely reflect what people can afford. Those with higher incomes tend to buy more expensive houses, and therefore already pay more Stamp Duty and Council Tax. Those choosing to rent more expensive homes tend to also pay higher market rents.

    Secondly, Holiday Lets also DO pay business rates instead of Council Tax but such business rates may be lower (or even exempt) and full income tax relief is available on any mortgage on a furnished holiday let, further reducing its tax liabilities. These advantages now skew the market away from traditional long lets. Is that what you are advocating or do you agree this inequality of tax treatment between short and long lets is an issue which perhaps needs addressed by removing the disadvantages imposed on long lets over recent years?

    Incidentally since Furnished Holiday Lets are regarded by HMRC as a business, it may qualify for a lower (10%) CGT rate than the punitive 28% applying to BTL property and with Short Lets' profits regarded as earned income, any year when they make a loss can be offset against other earnings (again this does not apply to long term BTL property).

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    Echis R a name of a viper.
    Wales has a dependentcy culture and hardly anyone on the council estates work. It was also European capital of unmarried mothers. You might notice that lots of the shop workers are English. If you can find a hedge cutter they will have their income supplemented with generous benefits.


    Edwin! Stop this! Joseph Parry was Welsh.

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    I live in Wales. It's far worse than what l have put, the economy is collapsing. Who are you Echis ? Lloyd George was Welsh so was woy Jenkins (former chancellor and euro freak) Lots of great people have come from here.


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