At a stroke, the Welsh Government could go a long way to solving the second homes crisis – here’s how
Dafydd Meurig, Deputy Leader of Gwynedd Council
While still dealing with the pandemic, Mark Drakeford must have had a peek at other items in his inbox and will be considering his priorities for the term ahead.
One of the most urgent of these must surely be dealing with the housing crisis that is strangling rural coastal communities, as any further delay will result in the demise of dozens or even hundreds of small towns and villages.
The First Minister is not short of advice on how to deal with the problem. Cyngor Gwynedd have made six practical recommendations as a result of a substantial report it commissioned last year. Dr. Simon Brooks has made 12 recommendations in a slightly later and very similar Welsh Government-commissioned report.
Although there is no single bullet as Mark Drakeford himself has said, all these ideas boil down to three fundamental approaches: taxation, licensing, and planning, and they all need to be tackled.
The licensing approach will likely take a couple of years to design and put into practice, and I’m well aware of the glacial pace of change in any planning policy. However, our communities do not have the luxury of waiting for these to come into force.
Fortunately, there is a taxation solution which comes as close to a silver bullet as we can get. And it can be done relatively quickly and easily – if the will is there it could be in place by the next financial year.
A minor amendment needs to be made to Section 66 of the Local Government Finance Act so that any dwelling house is defined as a dwelling house for tax purposes and thus has to pay Council Tax and any premium as appropriate – regardless of whether or not it is used as a second home or holiday let.
This simple change will close the so-called loophole which allows second homes to benefit from the Small Business Rate Relief scheme and hence pay zero taxes.
At a stroke, this will be a very strong deterrent to any house being bought as a second home, while at the same time raising millions of pounds for affected local authorities to provide affordable homes for local people.
In Gwynedd, this would mean being able to be bolder and move much faster with our already ambitious Housing Action Plan.
So my simple plea to the First Minister: Mr Drakeford, please ask your officials to call Cyngor Gwynedd – we’ve done the homework, we have the answers.