Welsh farming union seeks opt-out from incoming holiday home crackdown

A Welsh farming union is seeking an opt-out from legislation set to crack down on the number of holiday homes in Wales, saying that it will impact farmers who let out properties as a way to make some extra income.

From next April the Welsh Government will allow councils to set council tax premiums on second homes and long-term empty properties to 300%.

The criteria for self-catering accommodation being liable for business rates instead of council tax will also change at the same time, from 70 to 182 days.

But now the Farmers’ Union of Wales has written to Welsh Minister for Finance and Local Government Rebecca Evans urging her to seriously consider an exemption from the revised letting criteria for farm businesses.

In his letter, FUW President Glyn Roberts said that the Welsh Government had “encouraged farmers to diversify over recent years” including converting farm buildings into holiday lets.

“To date, the FUW strongly believes that the implications for diversified farm businesses have not been fully considered while making the decision to increase the number of days a property is actually let from 70 to 182 days during any 12 month period to be eligible for business rates,” he said.

“It should be remembered that the Welsh Government has encouraged farmers to diversify over recent years to make farm businesses more resilient in light of future changes to agricultural support policies, and that in what is believed to be the vast majority of cases, the conversion of farm buildings into dwellings has only been possible for self-catered accommodation purposes under Section 106 conditions.”

‘Unintended’

For many diversified farm businesses, actually letting self-catered accommodation units for at least 182 days per year will be practically impossible given the nature of farming, Glyn Roberts said.

“In light of the above and given that farmers who have genuinely diversified into on-farm accommodation provide the same type of accommodation as speculators from urban areas who invest in properties to let them out, and people wanting a second home who subsidise payments by letting it out as an AirBnB or something similar without reducing Welsh housing stocks or causing house prices to rise, such businesses must be supported in light of current and future challenges rather than being burdened with further barriers and stricter thresholds,” he added.

“Therefore, now that the Welsh Government has decided to increase the letting criteria to 182 days, the FUW would stress the need for self-catering accommodation units which are located on agricultural holdings or subject to Section 106 conditions to be exempt from such changes.

“I urge you as Minister for Finance and Local Government to seriously consider the above as you keep measures to address the impacts associated with second homes and short-term holiday lets under review and seek to avoid any unintended consequences.”

‘Fair’

The Welsh Government said in March that changing the criteria for self-catering accommodation from 70 to 182 days will stop second home owners from classifying homes as businesses to avoid tax.

“As part of the Co-operation Agreement with Plaid Cymru, we are committed to taking immediate action to address the impact of second homes and unaffordable housing in communities across Wales, using the planning, property and taxation systems,” Finance Minister Rebecca Evans said.

“As we continue to progress the package of measures and drawing on the latest evidence base, we will keep under constant review the whole range of levers available to use and how they may be deployed most effectively to meet our policy objectives and avoid any unintended consequences.”

She added that “I recognise the strength of feeling among self-catering operators and have listened to the representations from individual businesses and industry representative bodies.

“There is limited evidence available in relation to some of these considerations and I am grateful to the sector for providing additional information they have gathered from their members.

“This has been taken into account in completing the Explanatory Memorandum and Regulatory Impact Assessment, which makes use of the available evidence. I recognise that the stronger criteria may be challenging for some operators to meet.

“The purpose of the change is to help ensure property owners are making a fair contribution to local communities, for example by increasing their contribution to the local economy through greater letting activity or by paying council tax on their properties.”