Agenda item

Recommend to the full Council on 5 December 2024 that the following is the preferred option with regards to the level of Premium on the Council Tax of Second Homes and Long-Term Empty Dwellings for the 2025/26 financial year:

 

·       That Cyngor Gwynedd allows NO discount on class A second homes, under Section 12 of the Local Government Finance Act 1992 (i.e. no change).

·       That Cyngor Gwynedd allows NO discount and RAISES A PREMIUM OF 150% on class B second homes, under Section 12B of the Local Government Finance Act 1992 (i.e. no change).

·       That 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 (i.e. no change).

 

The report was submitted by Councillor Paul Rowlinson.

 

DECISION

 

Recommend to the full Council that the following is the preferred option with regards to the level of Premium on the Council Tax of Second Homes and Long-term Empty Dwellings for the 2025/26 financial year:

 

·       That Cyngor Gwynedd allows no discount on class A second homes, under Section 12 of the Local Government Finance Act 1992 (i.e. no change).

·       That Cyngor Gwynedd allows no discount and raises a premium of 150% on class B second homes, under Section 12B of the Local Government Finance Act 1992 (i.e. no change).

·       That 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 (i.e. no change).

 

DISCUSSION

 

The report was submitted confirming that a decision had to be made on the Council Tax premium levels for second homes and empty dwellings annually in a meeting of the Full Council. Members were reminded that the Premium levels were currently 150% for second homes and 100% for dwellings that had been empty for 6 months or longer (long-term). It was explained that the premium levels would automatically increase if there was an increase to the Council Tax setting.

 

A recommendation was proposed for the premium levels for second homes and empty dwellings to remain on the same levels for the next year.

 

The need to follow guidelines published by the Welsh Government was explained, confirming that new guidelines had been introduced since the premium levels were decided by the Full Council last year. It was detailed that the latest guidelines noted that the Local Authorities had the power to increase empty dwelling premium to encourage owners to bring these dwellings back into use, as well as increasing the supply of affordable housing available and make communities more sustainable.

 

It was reported that the latest guidelines introduced by the Welsh Government noted that a number of factors should be considered when deciding on the premium levels of Council Tax for second homes and empty dwellings. It was detailed that these included:

 

·       The number and percentages of long-term empty properties and second homes in the local area

·       The locations of the buildings

·       Impact on house prices and affordability

·       The local economy

·       Tourism industry

·       Public services

·       The local community

·       The Welsh language

 

It was reported that the Council had considered a number of other measures to ensure that more houses were available for residents to bring empty properties back into use.

 

It was confirmed that a public consultation was undertaken before introducing a Council Tax premium for second homes and empty dwellings for the first time, and before the premium was raised over 100%. It was ensured that the Council had implemented this requirement, reminding members that the latest consultation had been undertaken when increasing the Council Tax premium for second homes to 150%, back in 2022. It was noted that the latest guidelines had noted that there was no need to undertake further consultation should the Council wish to increase the premium levels once again, but evidence must be presented to show that detailed processes had been followed to justify reaching that decision.

 

It was reiterated that the Council's Research and Information service had been undertaking research on the impact of the Council Tax premium on second homes and empty dwellings recently, noting that there was not much change to the situation. It could be concluded from the results of the work that the premium levels did not need to be changed this year. It was reported that the results of the research did not show that the current premium levels were unsuitable. It seemed that the historical tendency of a main dwelling being converted into a second home had changed as a result of the premium, confirming that more second homes had been converted back into main residences. It was suggested that the Council Tax premium policy worked.

 

It was emphasised that the Article 4 Direction was also a useful tool for the Council because a planning application had to be presented to convert a main residence into a second home or short-term holiday accommodation, since it had become operational in September 2024. It was explained that these planning applications could be refused if the building was in an area where residents experienced difficulties finding a home due to the pressures of second homes on the community. The importance of monitoring the Direction was emphasised, ensuring the need for it to be operational for longer before assessing its impact fully.

 

Attention was drawn to the fact that the Welsh Government had expanded letting thresholds within the Non-domestic Rating (Amending the Definition of Domestic Property) (Wales) Order 2022, to approve a self-catering property paying non-domestic tax instead of Council Tax, if it did not reach the thresholds of the definition of the Order. It was explained that the property had to pay a second home Premium, as well as Council Tax if it did not address relevant thresholds. It was confirmed that the Council had the discretionary power to choose not to increase the premium in such situations, noting that consideration would be given to using these powers in the future, reiterating the need to develop a clear policy of the relevant exemptions. It was reiterated that the relevant types of developments included barns that had been converted into holiday accommodation, annexes, holiday cabins and caravans.

 

It was explained that the Welsh Government's latest guidelines noted that it was possible to appoint a revised premium level for dwellings that were empty for a long period. It was confirmed that this allowed the Local Authority to increase the incremental Council Tax premium levels on empty dwellings as they became empty for increasing periods of time. It was reported that some Local Authorities increased the premium levels according to this arrangement and it was noted that this would be considered by Cyngor Gwynedd for the future.

 

Observations arising from the discussion:

·       Attention was drawn to Plan 3E of the Housing Action Plan which detailed Council Tax exemptions on empty homes, in situations where residents purchased homes in which they were unable to live until work had been completed.

·       It was confirmed that further research into the impact of the premium on the housing stock in Gwynedd was intended, to ensure that the latest information was available for the Council when deciding on the Council Tax premium levels annually.

o   In response to an enquiry on capacity and resources to gather the necessary data, it was acknowledged that the Information and Research Service was not located within the Finance Department but officers had given assurance of their enthusiasm to continue to gather this data for the future.

·       It was asked whether a timetable had been taken into account to consider increasing the incremental premium levels on dwellings that were empty for extended periods.

o   In response, it was confirmed that a timetable had not been decided at present, but the need to engage with other Authorities was emphasised to get a better understanding of their arrangements and the impact that this had to ensure that empty dwellings were used once again.

o   It was assured that conducting this research was a priority for the Council, confirming that resources would be released to complete this.

·       The possibility of conducting a public consultation following this necessary research on empty dwellings’ incremental premium levels was explained. It was confirmed that some Authorities were increasing the premium level to a maximum of 300% for properties that were empty for a period of 5 years or longer and conducting a consultation would be necessary to ensure that such an arrangement was suitable to this area.