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Council Tax – Second homes and self-catering accommodation

Published: 13/10/2021

Later this month, Flintshire County Council’s Cabinet will be asked to support a response to a Welsh Government consultation on potential changes to the local tax system, with the aim of supporting local authorities to manage the impact of second homes and self-catering accommodation on the communities in which they are located. 

The Council was one of the first local authorities in Wales to adopt the Council Tax Premium Scheme in 2017. The Scheme provides an important mechanism to encourage owners of long term empty property and second homes to bring properties back into full use. Welsh Government are also seeking the views of Cabinet on future local taxation arrangements for self-catering accommodation which can be subject to Council Tax or Business Rates depending on the level of use. 

Gareth Owens, Chief Officer, Governance, said: 

“There is growing concern across Wales about the way in which self-catering accommodation is so easily able to switch from Council Tax to Business Rates, resulting in owners having no local tax liability to pay.

Although the problem is not as prevalent in Flintshire as it may be in other local authorities, there are 78 self-catering businesses in Flintshire operating from residential type property that might have transitioned into the Business Rates system from originally having a Council Tax liability – this also depletes the availability of residential housing.  

To enhance the system, we believe Welsh Government should urgently strengthen the local tax rules by adopting the UK and HMRC tax rules for properties that qualify as commercial self-catering lets and subject to Business Rates.

We also call on Welsh Government to undertake further research to assess the impact of self-catering businesses trading from residential type premises, automatically qualifying for 100% Business Rate Relief and not paying anything in the form of local taxes to the Council”.

The Council’s Deputy Leader and Cabinet Member for Corporate Management and Assets, Councillor Billy Mullin, said:

“We believe the retention of the Council Tax Premium Scheme is essential to address local housing issues but we do not see the necessity to go beyond a premium level of 100%.

Additional income generated from the scheme should not be ring-fenced solely to housing, we want the autonomy and flexibility to use the income to support changing priorities and cost pressures across the Council”.