Council tax premiums for long-term empty and second homes: guidance for local authorities

Local authorities must have regard to the Guidance on the Implementation of the Council Tax Premiums on Long-Term Empty Homes and Second Homes in Wales. Since the guidance was first published in 2016, a number of changes to council tax policy have been implemented and revised draft guidance is proposed.

This consultation applies to Wales only.

In 2021, the Welsh Government consulted on possible changes to local taxes for second homes and self-catering accommodation. The proposals contributed to 1 part, a fair contribution, of the Welsh Government’s 3 pronged approach to tackling the issues that can arise from large numbers of second homes in communities and to helping people to live affordably in their local areas. The consultation sought views and evidence from individuals and organisations on the existing discretionary powers which allow local authorities to levy a higher rate of council tax on second homes and long-term empty dwellings.

Following the consultation, legislation has been made which increases the maximum council tax premium that local authorities can decide to charge on second homes and long-term empty properties to 300%. The Council Tax (Long‑term Empty Dwellings and Dwellings Occupied Periodically) (Wales) Regulations 2022 will be effective from 1 April 2023.

The Welsh Government has also amended the criteria which determine whether self‑catering accommodation is classified as non-domestic property. The changes in the Non-Domestic Rating (Amendment of Definition of Domestic Property) (Wales) Order 2022 also apply from 1 April 2023. From that date, for a self-catering property to be classified as non‑domestic, it must be made available to let for at least 252 days in any 12 month period, and actually let for at least 182 days.

The new thresholds will ensure that self-catering properties are classed as non‑domestic only if they are being used for business purposes for the majority of the year and are making a substantive contribution to the local economy. From 1 April 2023, if a self-catering property does not meet the new letting criteria, it will be classified as a domestic property and will be liable for council tax. Where the local authority has determined to apply a premium to second homes, the owner will also be liable to pay the additional charge unless their property falls within an exception.

Representatives of self‑catering businesses and the tourism sector have reported that it will not be possible for some operators to meet the new criteria. In particular, it has been suggested that some self-catering properties are subject to planning conditions which prevent permanent occupancy or specify that the property may only be used as holiday accommodation and that this limits the options available to owner when the new letting criteria come into effect.

New legislation has therefore been proposed to extend Class 6 of the exceptions to the council tax premium. This will include properties with planning conditions which prevent occupancy as a person’s sole or main residence or specify that it may only be used as holiday accommodation. Such properties would become liable for council tax at the standard rate if they do not meet the letting criteria for definition as non‑domestic property but could not be charged a premium. It is intended the legislation will apply from 1 April 2023.

The changes to the maximum council tax premiums, the letting criteria and the proposed extension to the exceptions to the premiums have resulted in the need to review and update the current guidance.

Revised guidance is proposed Council Tax Premiums on Long-Term Empty Dwellings and Dwellings Periodically Occupied in Wales: Guidance on the Implementation, Administration and Enforcement.

The revised draft guidance is at annex a.

All local authorities should have regard to this guidance to ensure a fair and consistent approach is applied across Wales.

This consultation on the draft guidance will be open for a 6 week period. Following the end of the consultation, all responses will be considered and any amendments  which may be considered necessary will be incorporated into the guidance.

Once finalised, it is intended that the revised guidance will apply for practical purposes with immediate effect.

Question 1

Do you have any comments on the proposed draft guidance?

Question 2

The Welsh Government would like your views on the effect the draft guidance would have on the Welsh language, specifically on:

• opportunities for people to use Welsh
• on treating the Welsh language no less favourably than English.

What effects do you think there would be? How could positive effects be increased, or negative effects be mitigated?

Question 3

Please also explain how you believe the draft guidance could be formulated or changed so as to have:

• positive effects or increased positive effects on opportunities for people to use the Welsh language and on treating the Welsh language no less favourably than the English language
• no adverse effects on opportunities for people to use the Welsh language and on treating the Welsh language no less favourably than the English language.

Submit your comments by 22 December 2022, in any of the following ways.

• complete our online form
• download, complete our response form and email: LGFR.Consultations@gov.wales  
• download, complete our response form and post to:

Council Tax Policy Branch
Welsh Government
Cathays Park
Cardiff
CF10 3NQ

Under the data protection legislation, you have the right:

• to be informed of the personal data held about you and to access it
• to require us to rectify inaccuracies in that data
• to (in certain circumstances) object to or restrict processing
• for (in certain circumstances) your data to be ‘erased’
• to (in certain circumstances) data portability
• to lodge a complaint with the Information Commissioner’s Office (ICO) who is our independent regulator for data protection.

Responses to consultations are likely to be made public, on the internet or in a report. If you would prefer your response to remain anonymous, please tell us. 

For further details about the information the Welsh Government holds and its use, or if you want to exercise your rights under the GDPR, please see contact details below:

Data Protection Officer

Data Protection Officer
Welsh Government
Cathays Park
Cardiff
CF10 3NQ

E-mail: data.protectionofficer@gov.wales

Information Commissioner’s Office

Information Commissioner’s Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF

Telephone: 01625 545 745 or 0303 123 1113

Website: ico.org.uk

UK General Data Protection Regulation (UK GDPR)

The Welsh Government will be data controller for any personal data you provide as part of your response to the consultation. Welsh Ministers have statutory powers they will rely on to process this personal data which will enable them to make informed decisions about how they exercise their public functions. Any response you send us will be seen in full by Welsh Government staff dealing with the issues which this consultation is about or planning future consultations. Where the Welsh Government undertakes further analysis of consultation responses then this work may be commissioned to be carried out by an accredited third party (eg a research organisation or a consultancy company). Any such work will only be undertaken under contract. Welsh Government’s standard terms and conditions for such contracts set out strict requirements for the processing and safekeeping of personal data.

In order to show that the consultation was carried out properly, the Welsh Government intends to publish a summary of the responses to this document. We may also publish responses in full. Normally, the name and address (or part of the address) of the person or organisation who sent the response are published with the response. If you do not want your name or address published, please tell us this in writing when you send your response. We will then redact them before publishing.

You should also be aware of our responsibilities under Freedom of Information legislation. If your details are published as part of the consultation response then these published reports will be retained indefinitely. Any of your data held otherwise by Welsh Government will be kept for no more than three years.

Number: WG46231

This document is also available in Welsh. You can view this document in alternative languages. If you need it in a different format, please contact us.