‘Would the Leader of Council agree with me that where a business has created accommodation - utilising an annex, renovating a disused barn on a farm or other means - that this practice is not removing housing stock from local communities nor is it a second home in the traditional sense, and as such, should not be liable to any Council tax premium?’
Minutes:
‘Would the Leader of Council agree with me that where a business has created accommodation – utilising an annexe, renovating a disused barn on a farm or other means – that this practice is not removing housing stock from local communities nor is it a second home in the traditional sense, and as such, should not be liable to any Council tax premium?
Response by Councillor Darren Price – Leader of the Council:-
Thank you for the question and I think it’s a good opportunity really to try and explore some of the issues around this. As you will be aware we are consulting at the moment in terms of introducing a Council Tax Premium on both empty properties and second homes and that consultation continues and there will be a report coming to Cabinet and Council over the next few weeks so, its timely. Obviously, you are aware of the detail around this but, I thought it would be an opportunity just to set some context for others who are listening in and may not be as up to date in terms of the context. So, obviously, as I mentioned we are consulting. We have 2,000 empty properties across the county as things stand. We have around 1,000 second homes / holiday homes across the county as well. So, that means we have 3,000 properties across the county which either are not utilised at all or are under-utilised in some cases. The flip side to that, of course, is we know we have over 3,000 people waiting on the housing list and, I think that morally, there’s a duty on us, and national government to try and get to grips with that situation and re-balance the market.
I think there’s a unanimous view, I think, nationally that something needs to be done to tackle the problem of empty properties and second homes and, of course the Welsh Government have been clear following discussions with Plaid Cymru, and the inclusion of the Co-operation Agreement, that action needs to be taken on a whole range of issues. Clearly, the Minister, Julie James, is keen to make progress on this and she has been quoted continuously and I will quote her directly, just to provide some context. What she says is ‘that the continuing rise of house prices mean the people, especially younger generations, can no longer afford to live in the communities that they have grown up in. A high concentration of second homes or holiday lets can have a very detrimental impact on small communities and in some areas could compromise the Welsh language being spoken at a community level. That the urgency and gravity of the situation calls for further intervention which means real and ambitious actions are delivered at pace to inject fairness back into the housing system’. I’ve got to say that I agree whole heartedly with those sentiments. I think it’s really important that the Welsh Government is taking action on a number of fronts to try and address this. One of the tools that they have given local authorities of course is the council tax premium. There was previously a decision to ensure that Councils could introduce a 100% council tax premium but that has since been increased to 300%. There are changes in terms of the planning process to ensure that the split and the clarity between a main dwelling, second homes and short-term holiday let is further refined in future and there are moves as well to develop a statutory licensing regime for holiday lets. I think that all of these measures are important, and they can’t be looked at separately. They need to be looked at in the round.
I think it’s also important to note that obviously local authorities across Wales are now looking at this. A number of Councils, for example Gwynedd and Pembrokeshire have already introduced Council Tax Premiums in these areas and have done for a number of years. But we now have a situation where Councils such as Rhondda Cynon Taf, Monmouthshire, Conway, Bridgend and ourselves of course are looking to introduce similar measures and, it’s good to see councils across Wales taking positive action in that regards.
Turning specifically to the details in your question Rob, there are a number of exemptions which apply in terms of Council tax premiums, particularly with regards to second homes. There are seven classes in all which are exempt from a council tax premium:-
· The first one are dwellings being marketed for sale;
· The second one is dwellings being marketed for let;
· The third one, which reflects directly the question that you’re posing this morning, is to annexes forming part of or, being treated as part of the main dwelling;
· Class four relates to dwellings which would be someone’s sole or main residence were they not residing in armed forces accommodation. I think that’s really important;
· Class five relates to occupied caravan pitches and boat moorings. They are exempt;
· Class six refers to seasonal homes where planning conditions prohibit year round occupation and, again, that refers to the reference you have this morning with regards to barns in many cases
· Class Seven relates to job related dwellings
So, there is a range of dwellings and properties which fall outside of the Council Tax Premium Regulations. The definition of a second home is ‘a dwelling which is not a persons sole or main home and is substantially furnished. Dwellings where a planning condition prevents occupancy for a continuous period of at least 28 days in any twelve month period such as chalets and purpose built holiday homes are included in this definition and such dwellings are entitled to as I mentioned Class six exemptions.
Turning to the barn example that you referenced there, you will be aware that there is common practice to grant planning permission for a residential development and restrict its occupancy to holiday accommodation use only. This can often be the case with barn conversions where the permission sought is for its use for holiday let purposes rather than permanent residential accommodation and, as mentioned, those are granted exemption under class three. However, if a barn has been converted, without the holiday accommodation use only restriction or for someone’s sole or main residence then it would have to be classed as a second home or holiday let and, as such it would be eligible for a premium charge.
So, all in all, Rob what I’m trying to say it’s quite a complex situation. There are lots of things at play here. It’s not just a case of the Council Tax Premium. The planning regime is really integral to this as we set out to implement the council tax premium but also as we look to develop the area in future years. I think it’s fair to say that this has been an unregulated area for quite some time, but I think that the shape and the structure the Welsh Government are finally putting on the sector is to be welcomed. Finally, I would add that I wouldn’t want to pre-empt any contribution in terms of the consultation, which is still on-going but, clearly when we look at this as a Cabinet we will ensure that all of this evidence is taken on board before reaching a decision. Thank you
Supplementary Question by Councillor Rob James:-
Thank you for that information. Over the last few weeks and months, I’ve been meeting with individuals who have been involved with the agri-tourism sector which, I believe, is an important sector for this Council. I believe we need to be supporting farm holders in diversifying their operations and I think operating holiday lets as part of that is an important step. Now, one of the things that has been told to me is that the changes to the occupancy rates i.e: I think it’s 180 days that is needed to be classified as a viable business now by the Welsh Government due to changes recently means that they are liable to a big impact by this change in council tax. So, what I’m looking from you is a Leader, if I may is, just a commitment that we are seeking to protect agri-tourism in this council with any changes that we may look to bring in. Thank you
Response by Councillor Darren Price – Leader of the Council:-
Thank you Rob. The threshold is actually 182 days, not 180, but the point is well made. I think from the outset, it’s important to state that our intention is not to have any negative adverse impact on the tourism industry. We absolutely recognise that the tourism sector is vital particularly, in some parts of the county and I think that the proposal that we’ve got out for public consultation at the moment reflects that. As I mentioned earlier, there is scope to introduce a 300% premium on second homes and we haven’t suggested doing that as part of the consultation. We have suggested that a 50% or 100% contribution would be prudent. I think that’s based on the learnings and the experience of other authorities that have already implemented this. As I mentioned it’s been implemented in Gwynedd and Pembrokeshire for quite some time. Those are areas that are really dependent on the tourism sector and I don’t get the feedback from those areas that the premium at those levels has had a significant adverse impact on the tourism sector. But I think there’s a wider point here that we need to be mindful of, and I think that the planning regime offers us an opportunity to get to grips with this over the coming years and that’s around the supply of short term holiday let accommodation in the county. If we’re finding that businesses across the county are struggling to meet that threshold, I think there’s a discussion to be had then in terms of the supply of short term holiday lets and the sustainability of those businesses. But that’s something we are keen to engage with the sector over the coming months and years. Thank you