Have your say
Council Tax Premium Consultation 2024
Pembrokeshire County Council is seeking your views on Council Tax premiums that apply for second and long-term empty homes in Pembrokeshire. Considering your views is an essential part of our review process. The consultation seeks your views on:
-
Current Council Tax premiums for second homes
-
Current Council Tax premiums for long-term empty homes
-
Whether the Council should use its discretion following Welsh Government’s reform to self-catering holiday accommodation thresholds.
You can give your views by completing our council tax premium consultation survey 2024
If you would like a paper copy of the response form please call our Customer Contact Centre on 01437 764551, so we can make arrangements to post this to you.
The closing date for completed responses is Tuesday, 27 August 2024.
Current Council Tax Premium Arrangements
Background
The Council can decide to vary the Council Tax premium from 0% (i.e. no premium) through to 300% but must take account of statutory guidance when it makes this decision. The purpose of the legislation which allows the Councils to charge these premiums is to:
-
bring long-term empty homes back into use to provide safe, secure and affordable homes
-
increase the supply of affordable housing and enhance the sustainability of local communities
Second homes
By a second home we mean a property which is subject to Council Tax that is not someone’s sole or main residence.
From 1st April 2024, a Council Tax second home premium of 200% is payable in Pembrokeshire. This 200% charge is in addition to the standard rate of Council Tax.
Some properties do not have to pay the premium if they qualify for an exception. See the Second Home Premium section at Council Tax Information. Some second homes are let out as holiday accommodation (often on booking site like AirBnB). Some properties let out as holiday accommodation are classified within non-domestic rates. See holiday lets below.
Empty Properties
By an empty home, we mean a property that is subject to Council Tax and that is unoccupied and unfurnished. In order for a premium to be payable, it must have been continuously empty for at least one year.
Properties that are unoccupied and unfurnished will initially attract a 100% charge after any exemption has expired (Class A or Class C exemption). See Class A and C exemptions at Council Tax Information. The Council Tax premium for empty properties increases the longer it is empty.
At the Council meeting held with Members on the 14th December 2023, it was agreed to change the premium chargeable on long term empty properties from the 1st April 2024 to:
-
100% - for properties empty for 2 years
-
200% - for properties empty for 3 years
-
300% - for properties empty for 4 years or more
The premium is in addition to the standard rate of Council Tax for properties that fall within this definition.
There are many reasons why a property may be empty and there are exceptions to the empty property premium.
There may also be valid reasons why some properties remain empty for longer than the time limit permitted before premiums are chargeable. In certain exceptional circumstances, we can grant a discretionary discount.
For further information regarding any of the above please contact Revenue Services on 01437 764551 or revenue.services@pembrokeshire.gov.uk
Holiday Lets
By a holiday let we mean a property that is let out for holiday accommodation and has met the thresholds the Valuation Office Agency (VOA) use to qualify for Non-Domestic Rates (rather than Council Tax). Welsh Government determined the actual threshold the VOA use. The Council has the power to give a discretionary discount from the Council Tax premium for self-catering properties that transfer from NDR to Council Tax. The Council cannot change the thresholds or prevent a property that was in NDR transferring to Council Tax if it no longer meets the minimum days let per year threshold.
Welsh Government changed the thresholds to 182 days occupied and 252 days advertised from April 2023.
Use of Council Tax premiums
The use of income from Council Tax premiums is determined by Council and is included in our Medium Term Financial Plan. The following table shows how the income raised from both the second and empty homes premiums has been allocated in the 2023-24 and 2024-25 years.
Where funding is allocated:
Second homes |
2023-24 |
2024-25 |
| Affordable housing and enhancing the sustainability of local communities | 75% | 85% |
| Affordable housing programme | 18.75% | 11.25% |
| Enhancing Pembrokeshire Grant Fund* | 6.25% | 3.75% |
Where funding is allocated:
Empty properties |
2023-24 |
2024-25 |
| Bringing houses back into use | 100% | 0% |
| Affordable housing and enhancing the sustainability of local communities | 0% | 100% |
*The Enhancing Pembrokeshire Grant Fund supports projects that help address the negative impacts of long-term empty properties and second homes, and add value to communities. You can find out more about this at Enhancing Pembrokeshire Grant
Information you may find useful …
Pembrokeshire Housing Context
In December 2023, the Council adopted a housing strategy which focused on five priorities, the first of which is to increase the supply of affordable housing to meet local needs. There is currently an acute shortage of affordable housing in Pembrokeshire which is driving increased rates of homelessness. Although the number of homeless people that the Housing Advice Team was working with has decreased from 621 in April 2023 to 490 in March 2024, there is still acute housing need. As at March 2024, 490 people were in temporary accommodation. Continued high levels of homelessness are having an impact on the Council’s budget; despite access to Welsh Government grant to alleviate homelessness, the homelessness budget was overspent by £636,000 in 2023-24.
Whilst the combined social housing stock of Pembrokeshire County Council and the three registered social landlords who operate a joint housing register has increased, it is not keeping pace with demand. The number of people on the highest priority Gold band has increased from 1,590 to 1,749 (March 2024) in the past year.
House prices in Pembrokeshire have changed little over 2023-24 based on land registry price paid data. In April 2023 the average price for all types of properties was £225,000, by March 2024 it had increased by £1,000 to £226,000. This is in contrast to the period after the COVID lockdown which saw very rapid increases in house prices. House prices in Pembrokeshire (based on sales in 2023-24) are around 8% higher than the Welsh average. In September 2023, the house price/income ratio in Pembrokeshire was 7 to 1. This is above the Wales-wide average of 6.1 to 1 but below the England average of 8.3 to 1. House prices in many coastal areas are much higher than the Pembrokeshire average.
There are a number of community council areas within Pembrokeshire, where over 30% of the properties are second homes or holiday lets within the community. These concentrations are typically within the area covered by Pembrokeshire Coast National Park.
Pembrokeshire continues to have the second highest number of second homes in Wales after Gwynedd. From April 2022 to March 2023, the number of second homes subject to the premium fell from 3,734 to 3,364. Since this date, the number of second homes has increased gradually to 3,438 in April 2024. The reason for this increase is a corresponding fall in the number of NDR holiday lets. The number of these fell from 2,622 in June 2023 to 2,463 in April 2024.
Taking a longer-term perspective, the number of holiday lets doubled between 2016 and 2021, with growth rates being highest in coastal areas with high numbers of second homes. Part of the historic increase in holiday lets was due to second home properties moving to non-domestic rates. Welsh Government’s change to the days let thresholds in order to qualify for non-domestic rates is reversing this trend but it is still too early to assess its full impact. Likewise, although there is anecdotal evidence of both more NDR holiday lets and second homes being put up for sale, it is too early to judge the impact of the increase in premiums introduced from 1 April 2024.
Other legislative change that impacts on second homes and holiday lets
Changes to Planning Legislation
Welsh Government has introduced changes to planning legislation, which establishes new ‘use’ classes for second homes and holiday lets. Welsh Government has given discretion to local authorities to subject change of use classes to planning permission in some or all areas (Article 4 Direction). Our understanding is that Gwynedd is intending to introduce this change but neither Pembrokeshire County Council nor Pembrokeshire Coast National Park Authority have plans to introduce this change within 2025-26. As any such change would require specific consultation and giving notice, we think it is very unlikely these will be implemented for the 2025-26 year.
Discretionary visitor levy
The Welsh Government is planning to give local authorities the ability to charge a visitor levy on overnight stays.
The levy will be paid by visitors and if passed through the Senedd, each Council will need to decide if it wants to introduce a levy. We would need to consult with our communities before making this decision. A notice period will also be given to ensure businesses and visitors are prepared. Through the above process, the Welsh Government estimate the earliest a visitor levy could be in place in any part of Wales is 2027.
Technical detail section
Second homes
Second Homes are defined in the Housing Wales Act 2014. The Act defines second homes as, “a home that is not a person’s sole or main residence and which is substantially furnished.”
What is a long-term empty home?
A “long-term empty dwelling” is defined as one that has been both unoccupied and substantially unfurnished for a continuous period of at least one year in the Housing Wales Act 2014. Some of the empty properties that you may see in Pembrokeshire are not covered by this definition. This may be because they are classified as commercial premises (e.g. a vacant hotel) or because there is a specific exemption (e.g. if the home owner is in hospital or long-term care).
Exceptions
There are a number of exception classes for second or long-term empty homes. Where a second or long-term empty home falls within one of these classes, the premium will not apply. Information on second or long-term empty homes exceptions is available.
In November 2022, the Council updated its Council Tax Discretionary Discount Policy to remove properties with an annex separate to the main dwelling, and which are used for domestic purposes only, from liability for the second or long-term empty home premium.
All other dwellings, which are not a person's only or main home and substantially furnished, (and do not qualify for an exception class or meet the non-domestic rate threshold above) are eligible to pay the agreed Council Tax premium, as a second home.