Agenda item

To submit the report of the Cabinet Member for Finance.

That the Council makes no change to the Council Tax Premium for 2025/26. That is, for the financial Year 2025/26:-

 

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

·         Cyngor Gwynedd allows NO discount and CHARGES A PREMIUM OF 150% on class B second homes, in accordance with Section 12B of the Local Government Finance Act 1992.

·         Cyngor Gwynedd allows NO discount on homes that have been empty for 6 months or more and CHARGES A PREMIUM OF 100% on homes that have been empty for 12 months or more, in accordance with Section 12A of the Local Government Finance Act 1992.

 

The Cabinet Member for Finance, Councillor Paul Rowlinson, submitted a report asking the Council to reach a decision on the Premium level set on second homes and long-term empty properties for 2025/26.

 

The Head of Finance then referred to the detailed research work completed by the Research and Information Team to analyse the impact of the Premium on Gwynedd communities in the context of several other changes, such as the thresholds on self-catering accommodation and the potential impact of Article 4.

 

Members were given an opportunity to make observations and ask questions. 

 

The Cabinet Member for Housing referred to the Housing Action Plan projects to highlight how the Premium finance was supporting local people to stay in their communities: -

 

·         £68m had been spent creating 757 new units, with £10m of the amount coming from the Premium.

·         Tŷ Gwynedd (affordable housing being built by the Council) – 3 on the way to Llanberis, 10 in Coed Mawr, Bangor, 9 in Morfa Nefyn and 5 in Llanystumdwy, with other sites in Tywyn, Bala and Llanfachreth also under consideration.

·         New site for 5 local homeless individuals in Dolgellau (that shortlisted for Inside Housing's Best Supported Housing award).

·         The purchase of the former Government building in Penrallt, Caernarfon in the hope of housing over 37 people.

·         Various developments in Bangor, with at least 15 people housed.

·         Housing Lease Scheme - 27 private houses leased to the Council for housing local people, and a further 17 on the way.

·         House Purchase Scheme – 37 houses across the county purchased by the Council for gradual renting to local people – 3 in Aberdyfi, 2 in Abersoch, 2 in Barmouth, 6 in Caernarfon, 1 in Edern, 1 in Felinheli, 1 in Penrhyndeudraeth, 3 in Porthmadog, 3 in Pwllheli and 3 in Tywyn, with more on the way.

·         Social housing – 346 houses built and more than 100 on the way (with Cyngor Gwynedd receiving national recognition from the Welsh Government for the good collaboration with the housing associations).

·         Empty Housing Grants – 85 applications granted and another 20 on the way.

·         Gwynedd Home Purchase Scheme – Tai Teg – 42 households have been able to buy houses through the support of the scheme with a further 35 on the way, more than were granted in the previous 5 years.

 

The view was expressed that the imposition of a 150% Council Tax Premium coupled with the introduction of Article 4 has had a negative impact on tourism resulting in more guest houses for sale in our communities.  It was also noted that it was understood that £17.2m was currently standing in the Premium fund, with more money coming in by March next year, and it was asked whether the money was being adequately spent by the Council.  In response, it was noted: -

·         That the fund had increased over the years as the Housing Action Plan was a long-term plan. 

·         With houses for sale exempt from paying the Premium for 12 months, that could be an incentive for second home owners to put their houses on the market to see what happens.

·         That research would continue by looking at the trends to see if they are permanent, and the number of houses coming on the market and what happens to them would also be part of the research.

 

It was noted that there was concern locally that the policy of charging a Premium on second homes was pushing Welsh-speaking natives to let go of their inheritance, and also turning holiday homes, which had hardly any direct linguistic impact, into English-speaking households, which has a direct impact on the linguistic profile of areas.  It was suggested that the Premium level be reduced to 50%, which would mark a house as a second-house, but not impose a disproportionate burden on the indigenous population with a second-house for whatever reason.  In response, it was noted: -

·         When a 50% Premium was imposed on second homes, there was initially a trend for more houses to return to being the main home rather than vice versa, but the research clearly showed that this effect had been very short-term.

·         In raising the Premium level to 100%, and then to 150%, the research showed that the trend for more housing to return to the principal home continued, which was thought to justify keeping the level at 150%.

·         That the research looked at who was moving into the houses and their language, but people moved for many reasons, and possibly there was more movement among some cohorts than others. The pattern was complex and the research addressed questions like this.

 

It was noted that there was now a sense that visitors were not welcome in Gwynedd and that builders, etc., who are dependent on business from second homeowners, were concerned about having to lay off staff.  On this basis, the following amendment was proposed for the second clause of the decision sought in the report: -

 

·         That Cyngor Gwynedd allows NO discount and CHARGES a 100% PREMIUM on class B second homes, in accordance with Section 12B of the Local Government Finance Act 1992.

 

The amendment was seconded.

 

It was pointed out that the amendment was not disputed, but that it was believed that the matter should be referred to scrutiny following this meeting for consideration:-

·         Premium fund trajectory, i.e., was there a danger of the fund growing above what could be spent?

·         Was it possible to reduce the fund?

·         Are there other ways to spend the money that would benefit our communities?

·         Can our communities cope with the pace of change?

 

In response, it was noted: -

·         In terms of the pace of changes, that the proposal before them was not to change anything this year and to keep the Premium at the same level as last year and the previous year.

·         Not all of the Premium money went into the fund as the Council previously decided to put £3m of it into the revenue budget each year to deal with the pressures in the homelessness field.

·         If the Council decided at some point to reduce the Premium to 100%, that £3m would have to be found elsewhere, whether through cuts or increasing Council Tax or reducing the Housing Action Plan.

·         That the suggestion to refer the matter to scrutiny following the decision was sensible, and the Cabinet Member would undoubtedly wish to take this up in due course.

 

It was noted that keeping the Premium level at 150% was supported until all young people in Gwynedd have a home.

 

It was asked how quickly we could respond to the situation of co-operatives that deserve to be exempt from paying the Premium, such as Menter y Plu, which uses a former chapel as holiday accommodation.  In response, it was noted that it was not possible to provide an estimate of the timeframe as the Finance Department would have to formulate a policy, in consultation with the Legal Department.  The Chief Executive added that he wished to know more about the specific case in question, and suggested that he should have a conversation with the member outside the meeting.

 

The amendment to grant NO discount and CHARGE A 100% PREMIUM ON CLASS B second homes, in accordance with Section 12B of the Local Government Finance Act 1992 was voted upon.⁠ The amendment fell.

 

In his closing remarks, the Cabinet Member reminded members that voting against the original motion meant: -

·         Not charging any Premium at all which meant there would be no money available for the Housing Action Plan or homelessness.

·         Giving a discount to people with second homes and empty houses thereby creating a huge hole in Council funding.

 

The original motion was voted upon, namely that the Council make no change to the Council Tax Premium for 2025/26, and this was carried.

 

RESOLVED that the Council makes no change to Council Tax Premium for 2025/26.  That is, for the financial Year 2025/26: -

 

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

·         Cyngor Gwynedd allows NO discount and CHARGES A PREMIUM OF 150% on class B second homes, in accordance with Section 12B of the Local Government Finance Act 1992.

·         Cyngor Gwynedd allows NO discount on homes that have been empty for 6 months or more and CHARGES A PREMIUM OF 100% on homes that have been empty for 12 months or more, in accordance with Section 12A of the Local Government Finance Act 1992.