Council approves adoption of premiums on second homes and empty properties

In response to the need for more affordable housing, Carmarthenshire County Council will introduce council tax premiums on second homes and long-term empty properties. These will come into effect from April 1, 2024.

There are concerns at both a local and national level about the impact of second homes and empty properties on our communities.

The Council is working on increasing the provision of affordable housing in Carmarthenshire to bring long-term empty homes back into use and provide safe, secure and affordable homes that will enhance the sustainability of local communities. 

A recent consultation drew responses from residents, second homeowners and owners of empty properties on proposals to introduce a Council Tax Premium on properties that are largely empty. The majority of respondents agreed that long-term empty property have a negative effect on local communities in Carmarthenshire.

Welsh Government research in 2021 indicated that second homes can increase local property prices by raising the demand for houses. Together with house price inflation, the clearest direct impact of second homes was to reduce the housing stock.

The Welsh Government announced a three-pronged approach to address what they call a second homes crisis.

• Support - addressing affordability and availability of housing,
• Regulatory framework and system - covering planning law and the introduction of a statutory registration scheme for holiday accommodation;
• A fairer contribution - using national and local taxation systems to ensure second home owners make a fair and effective contribution to the communities in which they buy.

The Government gives local authorities the power to charge, or vary, a council tax premium of up to 300% above the standard rate on second homes and long-term empty properties.

At present, the Council do not apply a council tax premium scheme; second homes and long–term empty properties are charged at the standard council tax rate.  

Currently, half the local authorities in Wales apply a premium scheme with the level set by each authority varying from 25% to 100%. 

Cabinet Member for Resources, Cllr Alun Lenny said: “There are over 800 second homes in Carmarthenshire and 1,800 houses that have been empty for at least over a year – and a number for many years. Both categories of properties have an adverse effect on local communities. 

“The intention of introducing a premium on second homes and long term empty houses is to either encourage greater use of these properties, or ensure that their owners contribute more towards our communities. 

“In the case of the long-term empty houses, they have a negative effect on streets, can be the target of vandalism, and are a waste of a resource. 

“In our consultation, 61% of respondents agreed that long-term empty housing adversely affects local communities, and a majority agree with charging a premium. 

“We intend to charge a 50% premium on houses that have been empty from one to two years, rising to 100% between two and five years, and 200% after five years.

“On the issue of second homes, the answer lies, in part, in the legislation passed by Welsh Government in 2014 which has recently been amended and strengthened. The legislation aims to ensure that second homes, which are holiday lets, either get quality use by being let for at least 182 days a year, which will boost the tourism industry – or that owners pay a premium on the council tax as a contribution towards alleviating the negative impact second homes can have. 

“As a Council, we want to tackle this problem in a measured and reasonable way. We're proposing to charge second homes a 50% premium to start, with a view to raising it to 100% in April 2025. In addition to the seven exemption classes, stipulated in the legislation, we will also consider any other valid reasons for exemptions.

“By the year 2025/26, the total premium for both classes could potentially raise anything up to £3m, or release houses to become homes for Carmarthenshire residents, depending on the response of owners. These additional funds would be a valuable contribution towards helping the County Council maintain essential services at a time of great financial pressure – although, I must emphasise, that the primary aim is to encourage better use of housing in our county.”