Huge numbers of businesses are being affected by increased taxation on second homes, with many even closing down following councils having the power to charge a premium of up to 300%. On Thursday, Conwy council is set to decide whether to increase its council tax premium to 100%. Conservative Mark Isherwood, who represents north Wales in the Senedd, said that this taxation was causing some business owners to struggle to meet the threshold, leaving them liable for the premium, which they are unable to pay. Mr Isherwood had been contacted by a large number of legitimate self-catering businesses owners who were unable to make ends meet due to the premiums.
Rules on self-catering accommodation were changed to ensure that properties had to be let for at least 182 days to qualify for lower business rates instead of council tax. This has left many businesses struggling to meet the threshold. Carol Smith, who runs Porth Y Dwr cottage in Ruthin with her husband, has been forced to stop offering holiday lets and is instead planning to rent the property out, as they are unable to pay the increasing premiums. Business owners are also being forced to raise prices in order to cover the increase, putting their bookings in jeopardy.
Council leader Charlie McCoubrey argued that holiday lets were considerably less affordable than year-round rentals as 40% of the county’s 1,600 second homes were affordable housing. However, Robin Leatherbarrow, who runs a holiday let in Conwy’s Colwyn Bay, said that the 182-night occupation threshold was causing businesses stress. The Welsh government has said that these measures will help to develop a fairer housing market, creating decent affordable homes for people to rent or buy.
These measures are part of an effort to make it easier for people to afford homes in the areas where they grew up. Premiums of up to 300% will be charged in order to make local authorities prioritize their housing stock for local residents. Some councils are also being encouraged to recommend an indicative level of a premium of 200% on both categories from April 2025. However, it remains to be seen how this will affect the tourism industry, which is an important contributor to the Welsh economy
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