Welsh Government confirm they will crack on with holiday let tax hikes

The Welsh Government have confirmed that they will crack on with tax hikes on holiday lets that do not rent out their properties for more than half the year.

Following a consultation, Finance Minister Rebecca Evans said that she did “recognise the strength of feeling among self-catering operators” but would not be changing the planned law changes.

Some holiday let owners had argued that become unviable if planned law changes go ahead next year.

From April local authorities will be able to set council tax premiums on second homes and long-term empty properties to 300% from April 2023.

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. This will stop second home owners from classifying homes as businesses because they are let out for one fifth of the year.

“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,” 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.”

‘Anti-tourism’

Yesterday a tourism industry body has said that there are renewed concerns about the Welsh Government’s steps to legislate on the subject of holiday homes and lets as well as a proposed tourism tax as the staycation boom seen in Wales during the pandemic begins to dissipate.

The Welsh Association of Visitor Attractions said that 46.9% of members they surveyed had seen fewer visitors over the 2022 Easter period when compared with 2019, the last time all attractions were open over Easter.

Those suggested that those who had stayed in Wales during the pandemic were now back jetting off on foreign trips. They also suggested that potential tourists may be feeling the pinch of the cost of living crisis.

Ashford Price, Secretary of WAVA and the owner of Dan yr Ogof Cavs, said that members were concerned that the Welsh Government were pursuing “anti-tourism policies” such as a proposed tourism tax and plans to make it harder for holiday let properties to be eligible for business rates instead of council tax.

“All attractions are facing increased running costs, especially for items like electricity, staffing costs and rising food prices,” he said.

“Many members are finding it difficult to pass on these extra costs knowing that families are struggling themselves with cost-of-living issues, therefore days out with the family must continue to be affordable.

“The overall picture indicated by some attractions is that the weekly footfall is down, and though the weekends are holding up these numbers are not covering the fewer visitors seen in the week.”