Written question WQ89036

The Welsh Government considered a range of options for the letting criteria used to classify self-catering properties for local tax purposes, including at least 105 days actually let. The 182 days letting criteria reflect the settled policy position reached following consideration of a range of relevant factors, including 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.

The Welsh Government’s Regulatory Impact Assessment (RIA) was published alongside the legislation. The RIA includes the available evidence in relation to historic occupancy but it is not possible to predict how may properties will meet the criteria in future.

The Welsh Government continues to monitor the effect of the legislation but has no plans to undertake a formal review of the changes to the self-catering criteria in the short-term nor in isolation from the broader package of measures within our three-pronged approach to tackling the impact of large numbers of second homes and holiday lets can have on communities and the Welsh language. Such a commitment could create uncertainty for the self-catering sector, which is unlikely to be helpful in diverting its focus from responding to the criteria in place now and for the foreseeable future.

The Welsh Government does not intend to consider exemptions from the letting criteria, which apply equally to all self-catering properties across Wales. The letting thresholds apply nationally and consistently because they define a key aspect of the system: whether a property is treated as a domestic dwelling or a non-domestic holiday let for local tax purposes. There are no exemptions to this definition and this is not a new principle.

The Welsh Government has recognised that some self-catering properties are restricted by planning conditions preventing permanent occupation as someone’s main residence. We have extended the existing exceptions to council tax premiums to include properties with a planning condition which specifies that the property may only be used for holiday let or which prevents their permanent occupation as a person’s sole or main residence. Such properties would become liable for council tax at the standard rate if they do not meet the letting criteria, but they could not be charged a premium. We have issued updated guidance to local authorities regarding the implementation of council tax premiums on second homes and long-term empty dwellings. Local authorities also have discretionary powers to reduce council tax bills for particular dwellings or classes of dwellings.

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