'A step too far': Chalet owners fear triple council tax bills aimed at Wales' second home owners

Owners of holiday chalets have said they fear they could face huge council tax bills aimed at clamping down on second homes - even though they are unable to live in their properties all year-round.

Many owners already pay a council tax premium aimed at bringing down the number of mostly-empty properties in popular coastal and rural areas.

From April, that premium could see those bills increase by as much as three times.

That is because the Welsh Government has given local authorities the power to charge up to 300% council tax as part of efforts to make it more affordable for local people to remain in communities where there are currently a lot of second homes.

Abigail Davies and Julie Draper have now sold their holiday chalets in Ceredigion partly because of the looming council tax premium.

The premium would turn a £1,000 bill for a permanent resident into a £3,000 bill for second home owners.

Many argue they should not pay the council tax premium at all because by law their properties can’t be used as second homes; they can’t live in them all year round and are not allowed to access local services. 

Chalet owners Abigail Davies and Julie Draper have sold their holiday chalets in Ceredigion, in part because of the looming council tax premium - and want to highlight the issue facing current owners. 

Julie said, "Our main concern is that councils are continuing to charge up to 300% premium on properties that aren’t homes and will never be homes."

As well as not being able to live in a chalet for any length of time, people are unable to work from there - nor can you access local services such as schools, GPs or rubbish collection. 

Abigail told me, "They're built from wood. They they've always had planning conditions on them to be a holiday home. 

"To buy a chalet, you have to show your council tax from your permanent home, otherwise you can't buy one. So it's not ever been part of the housing stock. It's also on a holiday park. 

"You are renting the ground that it sits on. It's not a freehold, it's not a leasehold. It's a site license. You're paying ground rent of, I think, about £4,000. You're also then paying the council tax and now you're also paying the premium.”

Thomas Scarrott and his family run Clarach Bay Holiday Village near Aberystwyth where timber chalets dating back to the 1950s sit next to metal caravans which don’t attract council tax.

He has been campaigning to get clarity on the issue and said, “We think it's unfair that our chalet owners are being treated differently to the caravan owners when they have exactly the same use from the caravan and the chalet. 

“We don't feel that it's fair that they should be paying council tax. They certainly do not get the services associated with the council tax. 

“Everything you see on this park, the street lights, the roads maintained by us, not by the local authority. So what are they exactly paying the council tax for?”

All three are seeking clarity from the Welsh Government, having received what they call contradictory and confusing responses to previous efforts. 

It is intended to deal with the problem caused by high concentrations of second homes in popular rural and coastal areas. 

According to Senedd research, there were nearly 24,000 second homes in Wales in January 2022. 

Those homes are concentrated in certain areas. According to Senedd research, Gwynedd council estimated that 10.76% of available housing in the county was holiday homes. The figure for Pembrokeshire was 9.15% and for Anglesey it was 8.26%. 

Those totals contrast with 2.29% in Cardiff, 1.92% in Swansea and only 0.03% in Newport. 

The Welsh Government said anyone prevented by planning rules from occupying a chalet as a permanent home should be exempt from paying the premium.

A spokesperson said: “An exception from the council tax premium is in place for properties subject to a planning condition preventing occupancy for a continuous period of at least 28 days in any one year. 

“It is for individual authorities to decide whether to charge a premium in their areas, and they also have discretionary powers to reduce council tax bills.

“Our approach is designed to ensure all owners make a fair contribution to communities in which they own homes.”

When it comes to the 300% council tax premium due to come into force in April, officials point out that the figure is a maximum, that different local authorities can apply any level and that three authorities apply the current maximum of 100%.

The local authority in the cases of Abigail, Julie and Thomas at Clarach Bay is Ceredigion Council. 

The new rules have been introduced by the Welsh Labour Government as part of its Co-operation Agreement with Plaid Cymru.

A spokesperson said the council is currently in the process of reviewing its budget and Council Tax setting for 2023/24.

Properties in Wales and England are classified by the Valuation Office Agency which is an arms-length agency of the UK Government. 

The VOA does not decide if a property is a second home or not. It decides whether a property should be liable for council tax or business rates. 

A VOA spokesperson said, “The Valuation Office Agency assesses all properties for Council Tax or business rates based on whether their primary use is domestic or non-domestic. 

“Holiday chalets that are not rented out as holiday lets are assessed as domestic properties. This means they are liable for council tax.”

The council tax premium and other efforts to clamp down on the number of second and empty homes stem from the Welsh Government’s co-operation agreement with Plaid Cymru. 

Their spokesperson on housing and rural affairs, Mabon ap Gwynfor, said “I can understand the concerns that have been expressed by these chalet owners” and that “there will be an ability for them to appeal and I would urge them to discuss with the local authorities so that they can present their case clearly.”

But he said that when it comes to second and empty homes,  There’s a clear need to act because what we're seeing and we have seen over the last 50 years houses generally being bought up by investors for their own purposes so that they can become wealthy themselves at the expense of the communities. 

“That in turn pushes the value of property up in the area, meaning that local people can't afford to buy property or to rent in their own communities and having to move out. That has a detrimental impact on those communities and it hollows out those communities as a consequence.”

Andrew RT Davies said he believes this is the "wrong policy for the challenging issue of home occupancy".

The leader of the opposition, Andrew RT Davies, said he understands the concerns and backs the calls for clarity, saying “Clarity is vital when you're putting through legislation or regulation. Mark Drakeford himself is a chalet owner, he said so himself, so he understands the issue.”

But the Welsh Conservative leader added that, “This is the wrong policy for the challenging issue of home occupancy and home ownership here in Wales. 

“We know that the Welsh Labour Government haven't built enough homes here in Wales. They've only been building just under 6000 homes a year when we know the market needs about 12 thousands. 

“They've bought this council tax tripling into effect here in Wales that will capture a whole pile of properties, chalet owners being one of the examples that are going to be discriminated against and it is important that the Welsh Government engage with chalet owners to stop this happening so that they don't feel that they have to up sticks and sell their properties.”

Thomas Scarrott told me that if the problem isn’t resolved it will see other owners walk away from their chalets without freeing up any new properties for locals. 

“They'll sell up. They can't afford to be here. It's bad enough they have to pay the council tax in the first place. It's worse they have to pay council tax premium."

“We're in a cost of living crisis. People still want to be able to take the holiday, and rightly so. But there's only so much people can afford. And this is a step too far, in my opinion.”

Julie Davies said the same thing. 

“Owners are losing out,” she said. “They are literally handing the keys back and walking away with nothing. Having spent tens of thousands of pounds on these properties. I decorated them to an extremely high standard, as did many of the owners are literally handing the keys back and walking away with nothing.”

“It's not freeing up properties - though those chalets will now be left empty, or -demolished.”

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