Written question WQ84979

The announced changes to the letting criteria take account of the responses to the 12-week policy consultation on local taxes for second homes and self-catering accommodation undertaken in 2021, as well as factors such as the operation of the current thresholds and the thresholds applied for other purposes.

The Welsh Government is of the view that for a self-catering property to be treated as non-domestic for local taxation purposes, it should operate as a business for the majority of the year.

A Regulatory Impact Assessment (RIA) making use of the available evidence will be laid alongside the order, pending the outcome of the technical consultation on the draft order which closed on 12 April. The RIA will demonstrate the Welsh Government’s consideration of the potential impacts of the legislation.

Limitations on the availability of evidence related to occupancy levels do not prevent the Welsh Government from introducing changes. The evidence that is available will be included in the RIA. Historic occupancy is not necessarily a predictor of future occupancy, particularly in the context of an intervention that is intended to incentivise behaviour change and the increased use of under-utilised properties, for the benefit of local communities. Moreover, the changes to the local taxes will operate as part of the wider package of measures which form our three-pronged approach to tackling the impact of second homes and holiday lets on communities.

The Welsh Government has already undertaken a wide-ranging policy consultation on local taxes for second homes and self-catering properties, followed by a technical consultation on the draft regulations to amend the letting criteria. All properties providing self-catering accommodation, whether within the curtilage of a primary residence or otherwise, are classified for local taxation purposes according to the same criteria, and this is not a new principle.

A wide range of suggestions for alternative letting criteria was received in response to the policy consultation. The most common specific suggestion was 105 days actually let, but many respondents suggested higher figures. Some respondents were of the view that all properties providing living accommodation should be classified as domestic and liable for council tax, or suggested letting criteria so high that they would have the same effect. The Welsh Government is not duty bound to accept the most common specific response to a consultation.

This work is being carried out in collaboration with Siân Gwenllian, the Plaid Cymru designated lead member, as part of the Co-operation Agreement between the Welsh Government and Plaid Cymru.