Second Home Owners Face Challenges with Council Tax Increase
The Welsh government’s decision to implement a council tax premium on second homes has sparked a wave of discontent among homeowners and businesses in Pembrokeshire. The increase in council tax rates for second homes, reaching up to 200%, has led to a surge in properties being put up for sale as residents grapple with the financial implications of the new policy.
Rise in Property Listings
In July, the number of second homes listed for sale in Pembrokeshire skyrocketed by 255%, with 135 properties on the market compared to just 38 the previous year. Despite the influx of listings, actual sales have hit a record low, indicating the challenges faced by homeowners in offloading their properties amidst the council tax hike.
Impact on Housing Market
Estate agent Hamptons has reported that second home sales in Pembrokeshire only accounted for 4.5% of total sales in the first six months of 2024, a significant decline from 21% a decade ago. Local agents have expressed concerns that the properties being listed for sale are priced too high for first-time buyers, exacerbating the housing affordability crisis in the region.
Loopholes in Property Listings
There are suspicions that some homeowners are listing their properties as second homes in a bid to circumvent the increased council tax premium. Rhys Jordan, from Nested Estate Agent Pembrokeshire, highlighted that many properties are priced not to sell but to avoid paying the inflated tax, creating a glut of unsuitable properties on the market.
Economic Impact
The decline in the number of second homeowners in Pembrokeshire has raised concerns among local businesses about the potential impact on the economy. Matthew Ronowitz, who operates three restaurants in Tenby, emphasized the importance of second homeowners in sustaining year-round business trade and providing employment opportunities for local residents.
Community Support
John Mather, a local business owner, lauded second homeowners as valuable customers who contribute to the local economy year-round. He emphasized their role in supporting businesses in the area and driving economic activity beyond the peak tourist season, highlighting the positive impact they have on the community.
Challenges for Second Homeowners
Ifor William Hywel, a long-time second homeowner in Tenby, expressed frustration over the steep increase in council tax for his property. He raised concerns about the affordability of properties for first-time buyers and criticized the new policy as merely imposing another tax burden without addressing the underlying housing issues.
Balancing Act
In response to the backlash from homeowners and businesses, Cllr Joshua Beynon, cabinet member for corporate finance and efficiencies, defended the council tax premium as a measure to strike a balance between supporting the local economy and addressing housing challenges. He emphasized the importance of residents who contribute to the community year-round, contrasting them with absentee second homeowners.
Government Response
A Welsh government spokesperson reassured that they would continue to monitor the effects of the legislation to ensure it achieves its intended goals. The government’s stance on the council tax premium reflects their commitment to addressing housing affordability issues while supporting local economies in Wales.
Moving Forward
As the debate around the council tax premium on second homes continues to unfold, stakeholders in Pembrokeshire are advocating for a comprehensive approach that considers the diverse needs of residents, businesses, and the broader community. Finding a balance between promoting affordable housing and supporting economic growth remains a pressing challenge that requires collaborative efforts from all parties involved.