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A quarter of houses in coastal community face 100% second-homes tax hike in April

15 Dec 2023 2 minute read
New Quay. Picture by Heikki Immonen (CC BY 3.0).

Bruce Sinclair Local Democracy Reporter

Second home-owners in a west Wales county will pay a double council tax rate from next April, with over 27% of homes in one coastal location affected.

Ceredigion County Council’s December full meeting was recommended to back a Cabinet-supported a proposal to raise the county’s second homes council tax premiums from its existing 25 per cent to 100 per cent next year, effectively a double rate, with a further increase – to 150 per cent – to follow from April 2025.

Local tax rules

Areas with the highest proportion of second homes in the county are mostly coastal, the highest being New Quay, with a 27.2 per cent rate, followed by Llangrannog 17.1, Borth 14.1, Pontarfynach 11, Penbryn 9.6, Aberaeron 9.1, and Aberporth 8.4.

New Welsh Government local tax rules allow local authorities being to collect council tax premiums on second homes and long-term empty properties at up to 300 per cent.

At the December 14 meeting, members also backed increases in the empty properties tax premium, from the current 25 per cent, to 100 per cent for properties empty for up to five years, 150 per cent for five-ten years, and 200 per cent for over ten years.

‘Housing for local people’

Councillor Bryan Davies, leader of Ceredigion County Council, said: “The decision taken today is the culmination of a long period of consultation, discussion and evidence gathering.

“I trust that the change will be a positive step forward in tackling long-term empty properties, with the hope of ensuring that there is a good supply of housing available on the market for our local people.

“The premium on second homes also echoes similar rates in our neighbouring counties, meaning that Ceredigion would not become an exception in terms of low rates along the Welsh coast.”


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Padi Phillips
Padi Phillips
2 months ago

High time the plague of second homes was addressed in Ceredigion. Hopefully other, more radical interventions will be introduced to address the weakness of the local economy which is overreliant on tourism based businesses.

Arthur
Arthur
2 months ago
Reply to  Padi Phillips

So you accept the official version that £1.6m was raised by the Council from these people from April 2017 to March 2023 do you ?? I suggest you conduct some research my friend. I agree with you about the weakness of the local economy but where is the solution then? The views of those with no second homes is very interesting – this will have no effect on affordable homes. These are simplistic solutions that simply will not work.

John Barry
John Barry
2 months ago
Reply to  Arthur

The Local Authorities cannot be trusted to provide honest and truthful disclosure. They have way too many vested interest(s) and political strings being pulled. The lengths that Welsh Labour, Plaid Cymru and other interested parties will go to influence affairs in Local Authorities is frankly a disgrace. We witness this with respect to the insane 20 mph policy and with second home ownership. Tourism tax – in all forms – and second home taxation is unethical and indefensible. Wales is now carrying the highest tax burden of any UK country. No wonder businesses are looking elsewhere to create jobs. How… Read more »

CapM
CapM
2 months ago
Reply to  John Barry

Tourism taxes are the norm in many countries. Many internet sites have the information.

If you are not judging the governments and local authorities in these places to be acting unethically and indefensibly and of being negligent and incompetent also, what are your reasons for excusing them?

Or maybe you’ve already contacted Belgium, France, Germany, Croatia etc etc etc, and also a load of state authorities in the USA to inform them of your view of them.

Arthur
Arthur
2 months ago
Reply to  John Barry

Reply to John Barry – I am advised that if you want to build on your own land in Ceredigion, then you will need to pay 10% of the sale price ( not cost) if and when you sell the house. Quite apart from the morality ( some feudal system from the middle ages ?), does Ceredigion CC not believe that this restriction is actually causing some of the house price inflation ? ( restricting supply). Major deterrent I would say – margins are low / non existent for developers now anyway.

CapM
CapM
2 months ago
Reply to  Arthur

The owners of these “second homes” pay the increase in council tax, therefore more money will be available for services for the permanent residents of Ceredigion. Or the owners will sell to others who are willing to pay the increased tax.. Or the owners will sell at a lower price than the price they might have expected which will give locals a better chance of owning the properties. It won’t work if it’s the only measure taken and I’ve yet to meet anyone who thinks it will, but it’s one of the conditions that can contribute to more affordable housing… Read more »

hdavies15
hdavies15
2 months ago
Reply to  CapM

As has happened elsewhere, “second home” owners whose principal residence was in an authority not levying additional council tax have flipped their principal residence and logged their house elsewhere in Wales or in darkest England as the second home. Other wide boys and girls have “separated” with each partner taking up a primary residence and no doubt visiting each other regularly. And those are just the more simple blatant tricks. No doubt other more sophisticated dodges will follow in due course. Hot tip – watch what leading Welsh politicians do with their 2nd residences !

CapM
CapM
2 months ago
Reply to  hdavies15

“it’s one of the conditions that can contribute”

Arthur
Arthur
2 months ago
Reply to  hdavies15

Well done hdavies15 – not many people have twigged ! This is part of the problem and the previous 70 days was achieved in many places through relatives being named as ‘ customers’ ( I have this on official record by the way). Now Ceredigion just upped the stakes – I am not going to put this in writing as I do not wish to incite but I can guess what the next ‘ workaround’ will be. This is why I mention the cost of compliance.

John Barry
John Barry
2 months ago
Reply to  CapM

With respect, Wales must change political direction and address the fundamentals with the economy. £13 billion annual deficit, a further £9 billion economic harm due to 20 mph default speed limits, highest unemployment, lowest productivity, worst NHS performance, worst Highways and Transportation policies, worst Education performance, worst emergency service performance, lowest level of business investment and jobs creation.
The Devolved Administration needs to resolve these items to provide sustainable funding – not, by increasing taxation for local people, local properties and tourism. That is just madness.

CapM
CapM
2 months ago
Reply to  John Barry

The £13 billion figure is an over estimate for a number of reasons. Plenty of info on these reasons is available for those with the necessary levels of curiosity and interest.

The £9 billion figure again is an overestimate. Due to the incompetence of the Labour government who costed the extra time of non economy related journeys, such as driving to visit your Mamgu, into the figure!

Like you I want Cymru to change political direction. KTowards independence.
Is that the direction you wish for us to travel also?

John Barry
John Barry
2 months ago
Reply to  CapM

Yes – I would love Wales to be independent. However, there are enormous short term difficulties with this aspiration.
If we have an effective devolved administration and correct the shortcomings of the past 25 years, we stand a chance of thriving as a country and achieving independence.
I am not certain it can happen in my lifetime because we are starting from such a low position. However, I hope my children witness it in their lifetime….

CapM
CapM
2 months ago
Reply to  John Barry

The effectiveness of the devolved administration depends on the electorate.
The effectiveness of the electorate depends on a number of factors including how well informed it is.

The bandying about of inflated and inaccurate figures such as £13 billion and £9 billion maintains an uninformed electorate.
Which is what those who are anti independence want and need.

Arthur
Arthur
2 months ago
Reply to  CapM

Only please READ my response. This DID not happen in the last 6 years – it was the ordinary council taxpayers ( YOU) who paid for this £1.6m (FACT) . I can say this quite openly because it happens to be true. I have done extensive research although I cannot say any more on this forum at this juncture. They are treating transfers to holiday let as ‘ one off transfers’- best of luck with securing the data from FOI because they are extremely defensive- for GOOD reason. It took me a few attempts and only then through the perseverance… Read more »

Arthur
Arthur
2 months ago
Reply to  Arthur

I correct myself, it appears only 21 % of the total who voted were young people. If this is such a problem, why so low ?

John Barry
John Barry
2 months ago
Reply to  Arthur

Excellent points, well made.

CapM
CapM
2 months ago
Reply to  Arthur

I can’t entirely follow what you’ve presented but it seems that you’re suggesting that second home owners are taking advantage of loopholes that the council has possibly deliberately included for it’s own short term benefit.

If so then I’d suggest that the principle that second homeowners pay a higher tax is being badly implemented rather than that the principle is a bad one per se.

Is that your view also or do you think that second home owners should not pay more and that’s the end of it?

Arthur
Arthur
2 months ago
Reply to  CapM

Look at the evidence – the figure of £1.6m allegedly raised in respect for second homes if wrong. This is because of abuse of the system – it appears that the Valuation office did not have the necessary resources to police This is true across other parts of Wales as well and I have both written and oral evidence to support this. I have lodged the evidence with Audit Wales – it is more than likely that nothing will come of it. Just to give you an example – if you look at the number who at the beginning of… Read more »

Arthur
Arthur
2 months ago
Reply to  CapM

I will give you an example CapM – Margaret Thatcher’s community charge / ‘ poll tax’. principle was spot on’ everybody should make a contribution to local services. Collectible NO. The liberals came closer with local income tax and maybe this would work now with digital banking and Revenue and Customs able to eavesdrop. They then reverted to a property based tax because houses do not move. Fair ? No to my way of thinking. Just because you have saved up to buy a new decent property , why should you be taxed more ? Your income may be very… Read more »

Arthur
Arthur
2 months ago
Reply to  CapM

Not suggesting the council has done anything of the kind. They will be as annoyed as we are as to what has actually happened. The tax take is down – this is undeniable. It appears I am not allowed to go into detail as my comment was not authorised. Just not enforceable. Look what happened with the ‘ poll tax’ all those years ago. A tax is only good if you can police it effectively and cost efficiently.

CapM
CapM
2 months ago
Reply to  Arthur

It’s still not clear to me if it’s second home owners avoiding paying increased tax (for whatever reason or cause) that’s your primary concern or it’s that second home owners are being charged more tax.
If you identify which it is then we could perhaps discuss further.

Arthur
Arthur
2 months ago
Reply to  CapM

I believe in second home owners making a fair contribution to local services yes. Do I believe 250 % is fair ? No. Just had a look at the 2023/ 24 budget – some £180m. I look at the first few categories- Schools and culture 86m, Porth Cymru etc £15m. There must be some correlation with the budget and users ( we will call them consumers for now) of that service. I don’t know the exact split between second homes and official holiday lets but we are told the total amounts to some 6%. Let us say for the sake… Read more »

Arthur
Arthur
2 months ago
Reply to  CapM

OK I have done a back of the fag packet calculation based on the 2023/24 budget. I say that simply based on the costs and not the contribution 2nd home owners make, I say their Council tax should be around 50 % of the average house in Ceredigion, not 250 %. This is based on apportionments of costs for which second home owners are responsible – and I am being really generous with my numbers. Most of these costs will be variable. Please therefore provide me your own numbers as to why you think the tax premium is equitable. The… Read more »

CapM
CapM
2 months ago
Reply to  Arthur

Depending on your position on this issue you might find the following information about Denmark’s approach to summer homes interesting. From the Hjulmand Kaptain website “Crucial factors when you buy a summer houses in DenmarkUnder current Danish rules of law, foreign residents are not allowed to purchase real property in Denmark without obtaining permission from the Danish Ministry of Justice – unless they have previously been permanently resident in Denmark for at least 5 years. To evaluate your permission, the Danish Ministry of Justice will consider the following. Previous stays in Denmark Specific family relations in Denmark Specific business relations… Read more »

Arthur
Arthur
2 months ago
Reply to  CapM

Hey I am with you on ALL of these. One of the issues ( actually the main one) is the family connection. As I noted to the Council lead, many of these houses are family homes ( not bought at all), a large proportion will be Welsh speaking and many are being forced somewhat into making an impossible decision. Most of these people needed to move away for work and there is unsuitable or indeed no employment for them in Ceredigion. I accept there has been huge inflation in the housing market here in Ceredigion in recent years and now… Read more »

CapM
CapM
2 months ago
Reply to  Arthur

You’re not necessarily with me but rather with Denmark. As I pointed out Denmark is an independent country, It is very unlikely that local authorities or the Senedd could introduce such measures here. Higher tax on second homes/holiday homes properties are charged in many countries and regions so Cymru is certainly not unique in this matter. If you consider that second/holiday home ownership can be detrimental to permanent residents and that other levers, such as used by Denmark are not available here then applying higher taxes to those properties is one of the options. You have still not said if… Read more »

Arthur
Arthur
2 months ago
Reply to  CapM

I agree that we don’t have the constitutional levers. To be honest, Scotland is so far away from achieving independence and we are even further away. What do you mean by detrimental ? Financially, I don’t agree that these people are a detriment. Do I like it when I see towns / villages emptied out ? – no.( I understand New Quay and Aberaeron were very quiet this year so business / income is down anyway). I come back to the same point again – without well paid jobs, we are in an ever increasing decline, ‘helped ‘ by this… Read more »

CapM
CapM
2 months ago
Reply to  Arthur

 “I wish things were different “ That’s a attitude shared by many on many different issues. Very often the unstated coda is – as long as I don’t feel the pinch. The Danish legislation you admire regarding summer homes was not introduced for financial reasons but to make it difficult for non-Danish people to acquire those properties and so deter them from attempting to do so. This was an example of Denmark putting the aspirations, opportunities, well being etc of its citizens before the aspirations, opportunities, well being etc of the citizens of neighbouring countries. It’s unrealistic to imagine that no-one… Read more »

Arthur
Arthur
2 months ago
Reply to  CapM

Denmark got it right. Alas, Henry V111 has a lot to answer for.

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