In recent years, Welsh councils have implemented measures to address housing affordability, particularly focusing on the impact of second homeownership on local communities. One significant approach has been the introduction of council tax premiums on second homes and long-term empty properties.  

Council tax premiums: A tool for local authorities 

Since April 2023, local authorities in Wales have had the discretion to charge council tax premiums of up to 300% on second homes and long-term empty properties, an increase from the previous 100% cap. This policy aims to dissuade the proliferation of second homes in areas where housing demand for local residents is high.  

The revenue generated from these premiums provides councils with additional funding, which can be allocated to enhance the supply of affordable housing. The Welsh Government has encouraged local authorities to utilise these resources to address local housing needs effectively.  

Adjustments to self-catering accommodation criteria 

To ensure that properties classified as self-catering accommodations contribute appropriately to local economies, the Welsh Government revised the eligibility criteria for business rates. Effective from April 2023, properties must be available to let for at least 252 days and actually let for at least 182 days within any 12-month period to qualify for business rates instead of council tax. This change aims to prevent owners from misclassifying second homes as businesses to avoid higher council tax rates.  

Local implementation and impact 

The application of these premiums varies across Wales, reflecting the diverse housing challenges faced by different communities. For instance, Gwynedd Council has implemented a 150% council tax premium on second homes, generating significant revenue to support housing initiatives for local residents. 

By tailoring policies to their specific circumstances, Welsh councils aim to balance the benefits of tourism and second homeownership with the pressing need for affordable housing for local populations.  

The measures adopted by Welsh councils, including increased council tax premiums and stricter criteria for self-catering accommodations, represent proactive steps towards mitigating housing affordability issues. These policies empower local authorities to address the challenges posed by second homeownership, ensuring that residents have better access to affordable housing options. 
 
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