Agenda item

To submit the report of the Cabinet Member for Finance  (attached).

The Cabinet Member for Finance, Councillor Ioan Thomas, presented a report asking the Council for formal confirmation for 2020/21, of the previous decisions not to give discounts to second homes and not to give discounts on empty properties, and to raise a premium of 50% on such relevant properties.

During the discussion, the following observations were submitted by individual members:

·         That a gap in the legislation meant that the owner of an empty property could state that the property was for sale in order to avoid paying the premium.

·         That people were suffering, because it could take a year or longer to restore an old house, and it was asked whether the Council had looked into each case and allowed exceptions in special circumstances. To this end, an amendment was proposed and seconded to add a clause to the recommendation in the report, namely to request that the Cabinet looked at flexibility to consider a policy for a financial discount or aid for the owners of empty properties when the work of restoring them took longer than six months. As the Cabinet Member agreed to accept the amendment, he changed his proposal to this end, and the Council, without any discussion, showed its satisfaction with this tail to the proposal.

·         That there was a need for a system that rewarded, and not penalised, landlords who invested in their properties.

·         That there were three companies in Abersoch that advised people to convert houses into AirBnbs, without any type of planning control, and that the transfer of those houses from the Council Tax list to the Non-domestic Rates register meant that the Council was losing more money.

·         That the members should receive updates on the number of houses that transferred to the Non-domestic Rates register.

In response to some of the above observations, and to questions asked, it was noted:

·         That the regulations stated that an empty property that was for sale for a reasonable price was exempt from paying the premium for a year from the date it was placed on the market.

·         That individual circumstances, where substantial work was required on a house, could be dealt with through another part of the legislation, and the Cabinet could look at suitable policies, in accordance with what was proposed as an amendment.

·         That members and officers were still corresponding regularly with Welsh Government ministers and officers to press for change in the system which allowed properties used as self-serviced holiday units to be taxed through the Non-domiciliary Tax system, rather than the Council Tax system. There were many complexities with the planning system and the Council Tax system; however, with the support of the Welsh Local Government Association, the councils were attempting to negotiate a way forward.  Therefore, it was suggested that the members let the officers continue to follow this route for the time being, and in due course to report back on the progress with the work.

·         Although the Council was losing money with each house that transferred to the Non-domestic Rates register, the premium for the houses that were still under Council Tax generated approximately £2.5m income per year for the Council, and the intention was to ultimately invest this funding in housing for local people.  The current system was that people who were able to afford to pay for holiday homes were paying slightly more so that the Council could compensate for the fact that so many houses in Gwynedd were being converted into holiday homes. The income generated from the premium would not close the gap entirely, of course, but the whole idea was that the Council could use the premium to do something about the housing situation. The Head of Housing and Property Department was already in the process of drawing up a strategy to start addressing the problem, and a two-year resource had been harvested by the Council.  A further report on this could be presented to the Audit and Governance Committee should members wish to receive more information.

RESOLVED

(a)  RESOLVED that the Council makes no changes to the scheme for 2020/21.  That is, for 2020/21:

·         That Gwynedd Council allows NO discount on class A second homes in accordance with Section 12 of the Local Government Finance Act 1992.

·         That Gwynedd Council allows NO discount and RAISES A PREMIUM OF 50% on class B second homes in accordance with Section 12B of the Local Government Finance Act 1992.

·         That Gwynedd Council allows NO discount on homes that have been empty for 6 months or more and RAISES A PREMIUM OF 50% on homes that have been empty for 12 months or more in accordance with Section 12A of the Local Government Finance Act 1992.

(b) To request that the Cabinet looked at flexibility to consider a policy for a financial discount or aid for the owners of empty properties when the work of restoring them took longer than six months.