07 Jul 2021

In the wake of many councils throughout the UK beginning to use planning enforcement procedures against Landlords in an attempt to close down Serviced Accommodation in residential areas, the Labour-led Welsh Government has decided to use taxation laws to make the SA business less attractive to Landlords.

In a bid to make the Welsh housing market more affordable, the administration is calling for a mandatory registration scheme for all holiday accommodation, as well as possible new tax penalties. 

Later this year a pilot area of the country will be identified to trial both the register and changes to local taxes to “manage the impact” of second homes and self-catered accommodation. 

In 2020 Wales became the only part of the UK to give local authorities the power to charge 100% council tax increase on second homes.

Now the Welsh minister for climate change – Julie James, who is also responsible for housing – has set out a three-pronged approach to address the impact of second home ownership on communities.

The three areas of activity will be:

  • addressing affordability and availability of housing;
  • enhancing the regulatory framework, covering planning law and the introduction of a statutory registration scheme for holiday accommodation; and
  • what the Welsh Government calls “a fairer contribution”, using national and local taxation systems to ensure second home owners make a fair and effective contribution to the communities in which they buy.

No details have been set out as to exactly what those measures will look like when enacted, but James says: “The continuing rise of house prices mean people, especially younger generations, can no longer afford to live in the communities they have grown up in. A high concentration of second homes or holiday lets can have a very detrimental impact on small communities, and in some areas could compromise the Welsh language being spoken at a community level.

“…Our new three-pronged approach will kick-start a summer of action which will determine how we tackle this issue now and into the future. I am calling on all political parties across the Senedd to get involved in this, as we look to empower our communities to exercise their right to live in good quality homes, wherever they are in Wales.”

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