What happened to second home council tax rise?

Despite being agreed 18 months ago, a 75% rise in second home council tax has not been implemented yet by Powys County Council it has been revealed.

At a meeting of Powys County Council’s Finance Panel, councillors went through next year’s budget proposals page by page which includes a 3.9% rise in Council Tax.

But Plaid Cymru group leader Cllr Elwyn Vaughan pointed out that he saw no sign of an increase on the second/holiday home premium which would take it up to 75% above the normal Council Tax bill.

This rise was agreed at a full council meeting in September 2020 and then went out to consultation late in 2020. If implemented, figures from 2020 suggest it would gain the council an extra £350,000 in Council Tax.

Cllr Vaughan said: “I recall 18 months ago full council decided to raise the Council Tax on holiday homes and there are around 1,300 of them registered in Powys.

“There was a subsequent consultation period as is needed, but I see no reference to that increase happening in any documentation.

“I wouldn’t want to see our residents being clobbered by higher cost at this difficult time, while people who can afford more than one house being let off the hook.”

Finance portfolio holder and Powys’ Conservative group leader Cllr Aled Davies said: “It’s been swept up by the Welsh Government review on second homes, holiday homes and holiday lets and it’s important the legislation gives us the tools. By Elgan Hearn, Local Democracy Reporter

“There would be a risk that without legislation it would destabilise the tax base and shift holiday/second homes into the business rates section.”

Business rates, while collected by local authorities, are set by the Welsh Government.

The government receives the money and re-distributes it back to councils as part of the annual local authority financial settlement.

Finance Panel chairman, Cllr John Morris asked if anything could be done?

Cllr Davies said: “We’re waiting for the outcome of the consultation.”

Cllr Vaughan pointed out that local authorities “at this moment” have the legal right to raise Council Tax premium up to 200%.

Cllr Vaughan said: “There will be further legislation in due course, but that power already exists. The will of the council is not being implemented.”

Cllr Davies re-iterated that he didn’t want the council tax base “destabilised” or “reduced” with shifts to business rates.

“It would be the wrong move without closing that loophole,” said Cllr Davies.

The Welsh Government’s consultation on “local taxes for second homes and self-catering accommodation” took place between August 25 and November 17, 2021.

The government is now “reviewing the responses” and will publish an outcome “in due course”.

By Elgan Hearn, Local Democracy Reporter