Second homeowners clash with council over tax premium consultation

Bruce Sinclair, Local Democracy Reporter

A county council is currently consulting on the level of empty homes and second homes council tax premiums, but a group representing second home-owners is calling for more information.

Late last year, Pembrokeshire councillors voted to drop the council tax premium on second homes from 200 per cent, effectively a treble rate, to 150 per cent.

Prior to that, second-home owners in the county were charged a 100 per cent premium.

Under Welsh Government legislation, local authorities are able to increase the council premium on second homes to as much as 300 per cent, effectively a quadruple rate.

For empty properties, a single rate of 300 per cent is applied to all properties that have been empty for two years or more.

Holiday lets

In its consultation the council seeks public views on both the premiums and how any funding raised from the premiums in 2026-27 should be spent, and also whether Welsh Government should change the minimum number of days that a property must be let for in order to qualify for non-domestic rate self-catering accommodation tax status.

The latter is currently set at 182 days per year, with the consultation also asking whether the council should use its discretion to exempt holiday lets that transfer from NDR to council tax from any premium.

A group representing second home-owners, called PCC Second Homeowners Legal Group, is calling for more information to be provided on the impact of changing levels of council tax premium, particularly whether there has been any impact on the tourism, hospitality, building and retail sectors, and whether the premium has resulted in affordable properties being bought to the market for rent or sale as originally intended.

The group said: “With no information provided in the supporting documentation about the impact on the tourism, hospitality and retail sectors, as well as the wider economy, we believe that the consultation falls short on providing respondents with enough information to enable an informed response.”

It adds: “Moreover, in 2025 a decision was taken by PCC to allocate the premium revenue across a much wider range of services than was envisaged when the premium was first introduced. While the group understands the need for tax revenue to support wider activities including schools and youth services, these should be raised through the setting of appropriate levels of basic council tax to ensure continuity, rather than to rely on variable revenues depending on the proportion of second homeowners remaining in the county.”

‘Adverse effects’

In its consultation, Pembrokeshire County Council has said that while guidance on the premiums encourages it to use them to help meet local housing needs and address other local housing and sustainable community issues, it may be used for any purpose.

“Due to the adverse effect of long-term empty properties and second homes on both available affordable housing and the sustainability of local communities, the council has sought to strike a balance, ensuring that the income generated is utilised to address both issues.

“Since the Council Tax premiums were introduced, £10.7m has been allocated to the Affordable Housing Programme, £0.8m into Bringing Homes into Use and £7.1m for the Enhancing Pembrokeshire Grant Scheme.  For 2024-25 £9.9m has been allocated to the general fund budget in respect of elements of the budget relating to affordable housing and enhancing the sustainability of local communities and it is proposed that this arrangement will continue in 2025-26.

“The allocation to the general fund budget also aims to address the adverse effect of long-term empty properties and second homes on both available housing, e.g. homelessness, and the sustainability of local communities, e.g. reducing pupil numbers in schools, but in a different way to the aforementioned Affordable Housing Programme and Enhancing Pembrokeshire Grant Scheme, both of which are continuing.”

The consultation is open until August 31.