In response to the Welsh Government consultation on local taxes for second homes and self-catering accommodation, the FUW highlighted that the impacts associated with second homes should be considered as a pan-Wales issue for the agricultural community given that 80 percent of the total agricultural land in Wales is situated in the seven counties which contain two-thirds of all second homes.
The Union proposed that the maximum council tax premium for second homes should be increased incrementally to allow for the results to be monitored year on year, and for self-catered accommodation to be available for 280 days, rather than 140, and be let for at least 140 days, rather than 70, during any 12 month period to be eligible to claim business rates.
The Welsh Government has recently announced that from April 2023, the maximum level at which Local Authorities can apply council tax premiums to second homes and long-term empty properties will be increased to 300%.
Applying council tax premiums of 100% in selected counties has not achieved what they were intended to, therefore the FUW welcomed this announcement.
However, the results of such changes must be monitored year on year and the FUW believes that the spending of any additional revenue needs to be transparent and ring fenced for priorities such as to alleviate the impacts of second homes on local communities.
The criteria for self-catering accommodation to be eligible to claim business rates will also change from April 2023. Such properties will need to be available for at least 252 days and be let for at least 182 days in any 12 month period.
Although the thresholds go beyond what the FUW proposed, the revised criteria for self-catering accommodation to be eligible for non-domestic business rates will enable local authorities to identify legitimate accommodation providers who typically provide such services for most of the year.
However, regular monitoring will be required to ensure that those genuine farm businesses that have diversified into self-catering accommodation are able to meet the revised criteria and not unfairly penalised as a result of policy changes intended to tackle the issues associated with second homes.
The FUW will be responding to the Welsh Government consultation on the Draft Non-Domestic Rating (Definition of Domestic Property) (Wales) Order 2022 which closes on 12th April 2022.