Second Homes Tax Premium Not Expected To Increase

Second home-owners in Pembrokeshire are unlikely to see their council tax rise over the current treble rate next year, following a recommendation backed by senior councillors on October 7.

Second-home owners, since this financial year, have been paying a 200 percent premium on their council tax, effectively a treble rate, following an increase from the previous 100 per cent (or double rate) 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.

Long-term empty properties in the county are also currently charged a premium council tax rate: 100 percent after 24 months, 200 per cent after 36 months, and 300 per cent after five years.

At the October 7 meeting of Pembrokeshire County Council’s Cabinet, members received a review of council tax premiums for second homes and long-term empty properties, ahead of a recommendation to full council on October 17 for the setting of the premiums for the next financial year, ahead of setting the council budget on February 20 of next year.

The report also included a review of the council’s discretionary discount policy in relation to properties returning into the council tax list from non-domestic rating following the Welsh Government change to a 182 days criteria for holiday lets rate relief, as well as a previously-discussed notice of motion for a 10 per cent reduction in council tax for on-call firefighters.

A Pembrokeshire consultation has been undertaken on the level of Council Tax premiums and the results of the consultation were considered by the Policy and Pre-decision Overview and Scrutiny Committee and the Council Tax Working Group.

The latter, at its recent meeting, did not want any change in the empty properties premium, and wanted the second homes premium to remain at 200 per cent, or even decrease.

Presenting the report to Cabinet, Cabinet Member for Corporate Finance and Efficiencies Cllr Joshua Beynon stressed there was a need to “find a balance,” adding: “My personal feeling is I don’t think it’s right for us to be charging over the 200 percent level.”

He told members there was not yet sufficient data on the effects of the 200 per cent premium, and the 182-day rule was a Welsh Government policy, with a need for more information before any unilateral change.

He told members the consultation, which had one of the highest responses ever received by the council, saw 2,974 responses, with 2,155 from someone whose main residence is outside of Pembrokeshire, along with 67 responses from organisations.

The report said, from October 2017-August 2024, the number of second homes paying the premium had dropped from 3,889 to 3,221, with exemptions rising from 137 to 760 over the same period.

Cabinet member Cllr Neil Prior, who had supported a 100 per cent second homes tax premium, but not a 200 per cent rate told members he had some “incredibly active” second home-owners in his own community, said: “The second homes issue is a multi-generational issue; for generations Pembrokeshire people have benefitted from selling homes which has created the issue.”

He said that “the effects of historically low council tax levels” were now “coming home to roost,” with challenging council finances.

“It’s a divisive issue driven by a number of factors, but the harsh reality is we should be setting an appropriate level of council tax as a whole.”

He finished: “I can’t support 200 percent, I’m not going to be able in my conscience to support that.”

Members backed recommending to full council that the second homes premium remain at the current 200 per cent, with the long-term empty property rates also remaining at the current level.

Members also agreed not to adopt the discretionary discount, and that, on the 182-day rule, to recommend to full council to back writing to Welsh Government asking them to reduce the 182 days let threshold.