More second homes becoming main homes after council tax premium changes

Dale Spridgeon, local democracy reporter

There has been an increase in the number of second homes turning back into main homes in Gwynedd – according to a new report.

Research presented in a Cyngor Gwyndd report on the impact of recent changes to council tax premiums – used as tool to help address housing issues in the county – found they were “working”.

The council’s cabinet had been considering a report – ‘Council Tax discretionary powers to allow discounts and/or raise a premium on second homes and long term empty dwellings’ when it met on Tuesday.

Council tax premiums

The details came amid a discussion to approve the favoured options over council tax premiums on second and long term empty homes. A decision had been sought – and was approved – to recommend  retaining council tax premiums at the current levels. The recommendations will go to full council.

The decision had been sought and report presented by cabinet member for finance Cllr Paul Rowlands. He had hailed previous council tax premium changes as a “successful tool” in helping to address housing difficulties in the county.

Research detailed in the report stated: “In terms of properties moving between being a second home and being a primary residence, there has usually been a (net) flow of properties from main residences to second homes.

“But the net flow was the other way (i.e. from second homes to main residences) in the run-up to the premium increase to 100% in April 2021, and (more decisively and more long-lasting) before and after the premium increase to 150% in April 2023 that this flow has grown so that the number of second homes is now stable (i.e. this flow is around the same as the flow of second homes to main residences).”

Cllr Rowlinson said: “There are now more second homes turning back to main residences, so it appears the policy is working.”

Affordable housing

During the meeting, Cllr Rowlinson had also quoted from Welsh Government guidelines, saying that the power to increase the premium had been “a resource to bring long term empty dwellings back into use and to help local authorities increase the supply of affordable housing and make local communities more sustainable”.

The measures were used as “a tool in our housing policy not a way to make revenue,” he said.

Also referring to Article 4 – introduced in September – he said it was an “important tool” that restricted the ability to change the use of a property from a main residence into a second home without planning permission.

“We can set a policy which refuses permission in areas where it is difficult for people to find homes, due to the pressure of the numbers of second homes.” he said.

But, he added: “Article 4 only came in three months ago. I think more time is needed to assess the impact yet, before we change anything else.

“It is worth remembering, if we do need to raise the council tax significantly this year, which is looking likely, the premiums would increase automatically.”

His report explained that for the financial years, 2023/24 and 2024/25, the council had already raised a council tax premium of 150% on second homes and 100% on long-term empty dwellings, but legislation allowed the Council to charge a premium of up to 300%.

“However, if the council were to increase the premium rate it will have to consider whether such a decision would be reasonable, after considering statutory guidance, the result of research and legal advice,” he said.

“The decision is that we recommend to the full council that we keep the level of the premium as it is for next year.” he said.

Another change since premiums increased Cllr Rowlinson had said had been “extending the letting threshold which allows self catering accommodation to pay non-domestic tax rather than council tax”.

“If the property does not satisfy these thresholds then it must pay the second home premium as well as council tax,” he added.

“The council has discretionary powers not to charge the premium and it will consider using these powers in the future.”