A loophole that enables people to register second homes as business premises, escaping council tax and costing Local Authorities greatly in business rate relief is costing councils dearly and needs to be closed, says Plaid Cymru Shadow Spokesperson for Economy and Finance Rhun ap Iorwerth AM.
In First Minister’s Questions on Tuesday, Mr ap Iorwerth raised the issue and questioned what Welsh Government would be doing to solve a matter that is not only costing Local Authorities, but greatly effecting the ability of young people to get on the housing ladder locally.
The Ynys Môn AM expressed his support for initiatives such as charging a higher rate of council tax on second homes as a way of making people think twice or of bringing extra money in to County Councils, but said that the loophole regarding registering second homes as business premises needed to be closed and called on Welsh Government to act in resolving a matter that costs Councils dearly.
Mr ap Iorwerth said:
“It is well known the effect that buying second homes has on the housing market, and the ability of young people to get on the housing ladder locally – it pushes prices up and people out of the housing market.
“We know how serious the problem is, as 36 houses were sold on Anglesey in 2017/18 as second homes or as buy-to-let – and the problem is much worse in Gwynedd – which is a real concern.
“I am very supportive of measures such as charging a higher rate of council tax on second homes as a way of making people think twice or bringing extra money in to County Councils, but there is a pattern developing where more and more people – instead of paying council tax on second homes – are registering them as business premises.
“This means that they’re then required to pay business rates, but because they would be classed as small businesses, they receive full business rate relief, which costs Local Authorities greatly. This is a loophole that needs to be closed and I want to see Welsh Government working to resolve this issue.”
You can watch the full exchange between Rhun ap Iorwerth AM and First Minister Carwyn Jones here.