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Guardian columnist slams Welsh second homes tax ‘loophole’

25 Jun 2021 3 minutes Read
The coastal village of Aberdyfi, Gwynedd. Picture by Llywelyn2000 (CC BY-SA 3.0)

A Guardian columnist has slammed a second homes tax “loophole” in Wales.

George Monbiot described second homes are a “gross injustice” and as a “luxury that deprives other people of a necessity” in an article the paper.

He criticised legislation which enabled second homeowners to register their properties as businesses to avoid higher levels of council tax that local authorities were able to impose.

Plaid Cymru MS Sian Gwenllian has called it a “loophole” and has called on the Welsh Government to close it.

In a column for The Guardian, he said: “In Wales, local authorities are able to charge double the rate of council tax for second homes.

“But, though this power is contained in Westminster legislation, it doesn’t apply to the rest of the UK.

“Even so, it’s of limited use, now that second homeowners have discovered that they can register as businesses, pay nothing at all, and be rewarded for it.

“We need a progressive property tax, based on value and payable by owners, not tenants. And second homes should be taxed at a much higher rate.”

This practice has been criticised by Plaid Cymru MS Sian Gwenllian.

In a column for Nation.Cymru she wrote: “There’s a secret scandal going on in Wales – and it’s causing serious inequality.

“Currently, because of a loophole, a great number of second-home owners can avoid paying taxes.

“By registering their second-homes as small businesses, these owners can not only avoid having to pay council tax but they also receive full business rate relief.

“This anomaly in the system, which has gone unchallenged for too long, is a scandal.

“Second home ownership is at the heart of widening wealth inequality. Research shows that nine in ten additional property owners are in the top half of the wealth distribution. But in Wales, second home owners have found a way to save money!

“The problem lies with Section 66 of the Local Government Finance Act 1988. This Act allows second home owners to transfer their properties out of the council tax system if they let their properties as self-catering accommodation for short periods of the year.”

‘Housing crisis’ 

Monbiot also wrote: “How big would our housing crisis be if it were not for second homes? It’s a question almost no one in public life wants to ask, let alone answer. But it becomes more urgent every day.

“By a second home, I don’t mean one continuously rented to another household. I mean a property used either as a personal holiday home or as a place to stay while working away from your main home: in other words, a luxury that deprives other people of a necessity.

“Before the pandemic, government figures show, 772,000 households in England had second homes.

“Of these, 495,000 were in the UK. The actual number of second homes is higher, as some households have more than one; my rough estimate is a little over 550,000.

“Since then Covid, Brexit and the growing realisation that you can monetise your extravagance by putting your second home on Airbnb when you’re not using it have triggered a gold rush.

 

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Chris
Chris
28 days ago

Whilst the Grauniad revealed what it thought of Wales previously, I have nothing but the highest regard for George Monbiot. A shining example of the journalistic integrity that is rare today, a warrior of the environmental movement and seemingly a man with a strong sense of social fairness.
If more of the English establishment were like this gentleman, I’d be less inclined to want to leave UKBIN

Huw Davies
Huw Davies
28 days ago

He’s not wrong!

hdavies15
hdavies15
28 days ago

The same Monbiot who would have happily seen a large swathe of mid Wales ( and more later) given over to a rewilding project without any concern for the interests of farmers and others in the rural communities. Just another Anglo urban “lifestyle lefty” who would be content turning our country into a playground and retreat for swanky metropolitan elitists.

Wrexhamian
Wrexhamian
27 days ago
Reply to  hdavies15

You’re right about his rewilding project, and it has met with a lot of opposition in Cymru, but he’s right on the money in his statement about holiday homes.

arthur owen
arthur owen
27 days ago
Reply to  Wrexhamian

Monbiot is wrong about one issue and right about another one.How dare he make life complicated for some of our readers.

hdavies15
hdavies15
27 days ago
Reply to  arthur owen

Not complicated at all Arthur just that we need to be very careful how we deal with these toffs who like to come among us and tell us how to live. Had his daft rewilding ideas taken off as originally presented it would not have taken long for the rest of rural and coastal Wales to be taken over for exploitation by outsiders who “know better” than us how to use such resources.

Rex
Rex
25 days ago
Reply to  hdavies15

Some form of rewinding is desperately needed in Wales and the central belt is an obvious place to start. It needs to be handled carefully and done in cooperation with local farmers and landusers, not imposed from outside, but as a principle, I do think the actual concept of a return to more traditional farming methods that were less hostile to wildlife is sound.If you read Isabella Tree’s book Wilding, she shows how (with significant financial support from Natural England and others) she and her husband completely transformed their (large, feudal) estate in West Sussex from super-intensive dairy requiring ever… Read more »

j humphrys
j humphrys
22 days ago
Reply to  Rex

No, hit em where it hurts…..along our border! This can be sold to middle England as a “Lung for our countries to breathe.”.
Not knocking you, Rex,btw, especially as you have done the research.

Last edited 21 days ago by j humphrys
david hughes
david hughes
27 days ago
Reply to  arthur owen

Nice one arthur.

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