Vacation home owners will have to pay higher taxes and register in plan to tackle crisis
Part of Wales will end up a pilot position for new measures for example changes to tax and planning rules inside a bid to tackle Wales' second homes crisis.
Plans is going to be laid out on Tuesday using the Welsh Government because of decide a place to trial the brand new measures before they're potentially presented across the whole country.
The review will look at changing planning law and making all overnight accommodation owners register it as such. National and local taxation schemes might be set up to "ensure vacation home owners create a fair and effective contribution to the communities by which they buy". On a residential area where an 88-year-old says he's the only Welshman left when visitors leave.
Since 2021 councils have been able to raise reasonably limited on council tax on second homes. Local authorities in Gwynedd and Swansea both charge double council tax for holiday homes but rising numbers of second homes are being designated as businesses meaning owners pay no council tax whatsoever.
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At the start of 2021 it was estimated there have been 24,423 second homes in Wales which could be taxed but that did not include holiday units which are registered for business rates. Welsh Government figures show you will find an estimate 4,900 chargeable second homes in Gwynedd but because well as those there are another 1,976 holiday accommodation units which means a total of 10.76% of the total housing stock is holiday homes. Pembrokeshire, Anglesey, and Ceredigion are the counties with next-highest numbers of holiday homes.
However an in depth report by Dr Simon Brooks into second homes in Wales discovered that even within counties the issue of second homes was more pronounced in certain areas. Within the Llanengan community council area of Dwyfor, including Abersoch, 39.8% of properties are second homes. In Llanfelog, Anglesey, the figure is 25.5%.
The Welsh Government say that as well as exploring the rules on second homes it will likewise take a look at affordability of homes and also the quantity of housing that's available.
It could take a look at introducing practical measures for example changing the figures in your home Buy scheme. The Welsh Government scheme offers an equity loan to help purchasing an existing property. Currently that operates on a 50/50 model but that may change so one has to pay for less to get around the housing ladder.
Empty homes, of which there are other of in Wales than second homes, will also be considered part of the review, it's understood.
Welsh Government officials are looking at a scheme in Scotland which proposes a licensing scheme for holiday lets that will allow a nearby authority to limit amounts of such properties.
Plans to produce a registration scheme for those overnight accommodation and a consultation on changes to local taxes will begin within the summer.
A Welsh Language Community Housing Plan, to protect the particular interests of Welsh-language communities, will be published for consultation within the autumn.
Climate change minister Julie James said: "The continued rise of house prices mean people, especially younger generations, can't manage to reside in the communities they have grown up in. A higher power of second homes or holiday lets can have a very detrimental effect on small communities as well as in some areas could compromise the Welsh language being spoken at a community level.
"We've already taken strides on a few of these issues – last year we became the only nation in the UK to provide local authorities the power to introduce a 100% council tax levy on second homes. But the urgency and gravity of the situation requires further intervention, which means real and ambitious actions are delivered at pace, to inject fairness into the housing system."
Responding towards the Welsh Government's plan, Plaid Cymru's Mabon ap Gwynfor MS said: “This so-called “ambitious approach” to tackle the 2nd homes housing crisis is definitely an exercise in kicking the problem into the long grass if you don't take the necessary urgent action to deal with the crisis facing our communities.
“These weak measures will not be nearly enough to really get a handle on a housing emergency that is fast engulfing our communities in an alarming rate. There is nothing here about closing the council tax loophole. There's nothing here about imposing caps on second homes. And there is nothing here about bringing amounts of holiday homes into community ownership through public intervention – diverting profits to local developments like the provision of social housing. Actually, there isn't any detail just vague plans for more consultation.
“Plaid Cymru demands direct interventions to mitigate the housing crisis, such as changes to planning laws to permit councils to impose a cap around the quantity of second homes, trebling the Land Transaction tax on purchases of Second Homes and shut the loophole that allows second homeowners to join up their home as “businesses” to prevent paying the council tax premium, by amending the neighborhood Government Act to empower local authorities to higher control the housing stock."
Mabli Siriol, Chair of Cymdeithas yr Iaith, added: "The federal government say they intend to lead a “summer of action" to resolve the housing crisis, however they seem to instead be likely to spend the summer inactive and aimless. We are very happy to see that the Government recognises the intense situation facing our communities and the Welsh language, but real action is required. Exactly what the Government is proposing are vague and unambitious commitments, and pilot schemes and consultations which will take years to make a difference – and by then, there is a real danger that it will be too late."
