Have your say

Page Menu

Council Tax Premium Consultation 2025

About this consultation

Pembrokeshire County Council is seeking your views on Council Tax premiums that apply for second and long-term empty homes in Pembrokeshire. A Council Tax Premium is in addition to the standard charge of Council Tax which includes the precepts from Dyfed-Powys Police and Crime Commissioner and Town and Community Councils.

Please read the background information for details including the current Council Tax premiums, Pembrokeshire Housing context, definitions and legislation.

Considering your views is an essential part of our annual review process. The consultation seeks your views on:

Council Tax premiums for second homes for 2026-27
Council Tax premiums for long-term empty homes 2026-27
How any funding raised from the premiums in 2026-27 should be spent
Whether Welsh Government should change the minimum number of days that a property must be let for in order to qualify for Non-Domestic Rate self-catering accommodation tax status
and whether the Council should use its discretion to exempt holiday lets that transfer from NDR to council tax from any premium.

Your views

You can give your views by completing our online response form (opens in a new tab).

If you would like a paper copy please call our Revenue Services on 01437 764551 or email revenue.services@pembrokeshire.gov.uk so we can make arrangements to send this to you.

The closing date for completed responses is Sunday, 31 August 2025.

The responses you provide will be compiled into an anonymised report (i.e. if you provide any personal details, such as your name, as part of your response we won’t include these details) and used to inform an Integrated Impact Assessment. Cabinet will consider these at its meeting on the 6 October 2025. A final decision on the options, including the use of any funding raised by the premiums will be made by full Council at its meeting on the 9 October 2025. This decision will come into effect from 1 April 2026.

Current Council Tax Premium Arrangements

Background

There are two situations in which the Council can decide to charge a Council Tax premium from 0% (i.e. no premium) through to 300%. They relate to second homes, and to long term empty properties. The Council must take account of guidance for local authorities on council tax premiums on long-term empty properties and second homes (opens in a new tab) when it makes a decision about this. A decision about what, if any, premium to charge needs to be taken every year.

The purpose of the legislation which allows the Council 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

Welsh Government publish information on council tax premiums (opens in a new tab) on their Stats Wales website and this has more detailed information on the rates each council charges.

This autumn the Council will take a decision about what the level of any premiums charged in the 2026-2027 financial year will be. The Council will at the same time take a provisional decision about how the monies raised from the premiums should be spent. That decision will only be provisional because it may need to be revisited when the Council comes to set its final budget and its rates of council tax for 2026-2027, in light of all the up-to-date financial circumstances. Usually, the budget is set in February or early March each year. Likewise, the decision about the level of premiums can if necessary be reconsidered before the start of the financial year in which they will be charged.

However, the Council will normally adhere to its original decision about the level of premium unless there is a strong reason to change that. The purpose of taking that decision in autumn each year, in advance of the final budget decision, is to give people affected by the premiums as much notice as reasonably possible of what they are likely to be (especially relevant if the premiums may increase as compared with the previous year). The Council will also aim to adhere to its provisional decision about how premium income should be spent, unless changes in the budgetary position from what was expected mean that it is appropriate to do something different in the final budget.

The purpose of this consultation is to seek views both about the level of premiums and about how the money raised should be spent, as well as some other related questions identified at the end of this consultation document.

In previous financial years we have set both second homes and long-term empty homes premiums (see section below) because the level of second homes (and holiday lets) in many coastal communities is so high that it is hindering local people’s ability to live in them and that it is damaging the character and sustainability of these communities. Long term empty properties have a similar impact on communities. Our view is that the premiums are helping to deter people purchasing properties for use as second homes and encouraging empty property owners to bring them back into use or sell them. Revenue raised is used to increase the supply of affordable housing and to help mitigate the adverse impacts of second homes and long-term empty properties on local communities, thus making them more sustainable. Some responses to our previous consultations (which have been reported to Council) have made these points.

Second Homes

By a second home we mean a property which is subject to Council Tax that is also not someone’s sole or main residence and which is substantially furnished. All figures relate to Pembrokeshire.

On 4 June 2025, there were 4,328 second homes. These do not include the 2,003 self-catering properties that are classified within non-domestic rates rather than council tax. See holiday lets below.
Some second homes do not have to pay the premium if they qualify for an exception and on 4 June 2025, 825 (or 19% of second homes) did so. For more information, see the Second Home Premium section.
On 4 June 2025, there were 3,503 second homes that were subject to the council tax premium.
For this financial year (1 April 2025 to 31 March 2026) the council tax second home premium rate in Pembrokeshire is 150%. This 150% charge is in addition to the standard rate of Council Tax which includes the precepts from Dyfed-Powys Police and Crime Commissioner and Town and Community Councils.
All Welsh Councils apart from Blaenau Gwent CBC and Torfaen CBC charge a second home council tax premium with the majority currently charging a premium of 100% or close to this.
Some second homes are also let out as holiday accommodation (often on booking sites like AirBnB). If a property is advertised for more than 252 days and is let for 182 days in any 12-month period, an owner can apply to the Valuation Office Agency to transfer into non-domestic rates.
Second homes owners may be liable to pay other sorts of tax that owners of property who are the sole or main resident do not usually have to pay. These include Higher Rate Land Transaction Tax (upon purchase) and Capital Gains Tax (upon sale).

Long-Term Empty Properties

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. All figures relate to Pembrokeshire.

Empty properties may be exempt from council tax. Examples include a property that has been empty for less than six months, under structural repair, where the owner is in hospital or residential care or where the owner has died and probate is still to be granted. Properties that are unoccupied and unfurnished will initially attract a 100% charge after any exemption has expired.
On 4 June 2025 there were 1,442 empty properties that were exempt from Council tax.
If a property (that is not exempt from council tax) has been continuously empty for at least one year, then a Council can decide to charge an empty homes council tax premium. On 4 June 2025, 459 homes had been empty for more than six months but less than one year. A further 322 properties were empty for between one year and two years.
For this financial year (1 April 2025 to 31 March 2026) the long-term empty council tax premium charged by Pembrokeshire County Council is 300% for a property that has been empty for 2 years or more.
On 4 June 2025, there were 505 long-term empty properties that were paying the premium.
All Welsh Councils (apart from Torfaen) charge a long-term empty council tax premium. Most councils charge tapered rates typically starting at 100%; the longer a property has been empty, the higher the charge.

There are many reasons why a property may be empty and there are exemptions and exceptions to paying both council tax as well as any premium. As at June 2025 63% of chargeable empty properties do not pay a 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, the Council 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

Non-Domestic Rates Self-catering Accommodation

By Non-Domestic Rates (NDR) self-catering accommodation we mean a property that 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 to make this distinction.

On 4 June 2025, there were 2,003 units of NDR self-catering accommodation. The number has dropped from 2,648 in April 2023. In the past three months the VOA has reviewed Pembrokeshire’s NDR self-catering properties’ eligibility and as a result, the number of NDR self-catering properties has dropped by a further 160 in June 2025 and further falls are possible. Equally, numbers may rise due to successful appeals against the VOA’s decision.

Welsh Government changed the thresholds to 182 days occupied (from 70 days occupied) and 252 days advertised (from 140 days advertised) in April 2023. We are asking for respondents’ views on whether they think the 182 days let threshold is appropriate.

There is a second homes council tax premium exemption for properties that cannot be used as a permanent residence (these are sometimes requirements of the properties’ original planning permission).

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. We are asking for respondents’ views on whether the Council should exercise this discretion.

NDR self-catering properties that have a rateable value below £12,000 may qualify for small business rates relief and those with a rateable value below £6,000 may qualify for 100% rates relief.

Historic Council Tax Premium Levels

The following table shows the level of Council Tax premiums set by the Council.

Second homes Council Tax premium

Financial year	2020-21	2021-22	2022-23	2023-24	2024-25	2025-26
Rate Charged	50%	50%	100%	100%	200%	150%
Maximum permissible rate	100%	100%	100%	300%	300%	300%

The impact of the premium is best judged by the percentage of second homes (including those receiving an exemption from the premium) plus the number of Non-Domestic Rates self-catering accommodation properties. This is because of the transfer of properties between these two tax types discussed above.

Analysis shows that using 2021 as a base year, the number of second homes plus the NDR self-catering properties increased in most of Pembrokeshire’s 77 Town and Community Council areas in both 2022 (49) and 2023 (34). By contrast the number decreased in both 2024 (43) and 2025 (49) when higher rates of second homes council tax premium of 200% and 150% were charged. Whilst it is not possible to attribute all of this change to the impact of the second homes premium (there were also changes in the wider housing market) we know from comments made in the respective council tax premium consultations that higher levels of premiums is likely to have played a part.

Long-term Empty Homes Council Tax Premium

The following table lists the level of long-term empty homes council tax premium. A taper mechanism was used up until 2024-25. Changes in how the taper works and how quickly it comes into effect will change the number of properties subject to the premium.

Financial year / Period empty	2020-21	2021-22	2022-23	2023-24	2024-25	2025-26
1-2 years	0%	0%	0%	0%	0%	0%
2-3 years	0%	0%	0%	0%	100%	300%
3-4 years	25%	25%	25%	25%	200%	300%
4-5 years	50%	50%	50%	50%	300%	300%
5 years or more	100%	100%	100%	100%	300%	300%
Maximum permissible rate	100%	100%	100%	300%	300%	300%

The number of long-term empty properties subject to the premium dropped by 147 in 2024-25 from 684 to 537.

Use of Council Tax Premiums

Authorities are expected to report on the premiums and the additional revenue generated. In addition to information which authorities are required to report to the Welsh Government, they are encouraged to publish on their websites various details relating to the income generated, including how the additional income raised has been used to tackle the problems caused by long-term empty properties and second homes, or to address other local housing or sustainable community issues.

It is clear from the statutory guidance that the Council is encouraged to use the Council Tax premiums to help meet local housing needs and address other local housing and sustainable community issues, including bringing long-term empty properties back into use to provide safe, secure and affordable homes, and increasing the supply of affordable housing. However, it is also clear from the statutory guidance that the Council may use the additional revenue from the Council Tax premiums for any purpose, and that the overall policy intentions include enhancing the sustainability of local communities or tackling the problems caused by long-term empty properties and second homes.

Due to the adverse effect of long-term empty properties and second homes on both available affordable housing and the sustainability of local communities, the Council has sought to strike a balance, ensuring that the income generated is utilised to address both issues. Since the Council Tax premiums were introduced, £10.7m has been allocated to the Affordable Housing Programme, £0.8m into Bringing Homes into Use and £7.1m for the Enhancing Pembrokeshire Grant Scheme. For 2024-25 £9.9m has been allocated to the general fund budget in respect of elements of the budget relating to affordable housing and enhancing the sustainability of local communities and it is proposed that this arrangement will continue in 2025-26. The allocation to the general fund budget also aims to address the adverse effect of long-term empty properties and second homes on both available housing, e.g. homelessness, and the sustainability of local communities, e.g. reducing pupil numbers in Schools, but in a different way to the aforementioned Affordable Housing Programme and Enhancing Pembrokeshire Grant Scheme, both of which are continuing.

This twin track approach to allocating income from the Council Tax premiums in this manner is felt to have a more significant impact and benefit to the residents of Pembrokeshire than a single-track approach, when addressing the adverse effect of long-term empty properties and second homes on both available affordable housing and the sustainability of local communities within the county.

Allocation of Council Tax Premiums for 2025-26

Council approved the following:

1). The income generated from the Council Tax Premium for Second Homes for 2025-26 to 2028-29 be allocated as follows:

92.00% to fund elements of the Council’s budget relating to affordable housing and enhancing the sustainability of local communities
6.00% to fund the Affordable Housing Programme
2.00% to fund the Enhancing Pembrokeshire Grant Scheme

2). The income generated from the Council Tax Premium for Long Term Empty Properties for 2025-26 to 2028-29 be allocated as follows:

100% to fund elements of the Council’s budget relating to affordable housing and enhancing the sustainability of local communities
0% for bringing empty properties back into use

The following table outlines the elements of the budget relating to affordable housing and enhancing the sustainability of local communities for 2025-26.

Service	2025-26 £'000
Homelessness	2,050
Housing Standards	200
Schools	6,027
Youth Service, Youth Offender Teams & Youth Justice Services	900
Sustaining the Public Realm - including Beaches, Parks & Open Spaces, Public Conveniences, Street Cleansing	1,150
Total	10,327

Appropriation to Reserve from Council Tax Premiums:	2025-26 £'000
Appropriation to Affordable Homes Reserve	502
Appropriation to Enhancing Pembrokeshire Fund	167
Appropriation to Bringing Homes into Use Reserve	0

Affordable Housing Programme

Funding for the affordable housing programme has been provided from the Council Tax premiums for second homes and long-term empty properties at varying percentages, since the introduction of the Council Tax premiums.

Cabinet considered a report on the utilisation of long-term empty dwellings and dwellings periodically occupied Council Tax premium for delivery of affordable housing in Pembrokeshire on 13 February 2023 and resolved that the allocation of Second Homes and Empty Properties Council Tax Premium be agreed to reduce pressures in the Housing Service sector, and to increase the supply of social and affordable housing in the County through a range of programme initiatives reported to Cabinet annually. To include:

a). Accelerating the pace of social and affordable housing delivery through support for ‘turn-key’ developments

b). Development and support for an empty property grant scheme

c). Development of an affordable housing/shared ownership product for Pembrokeshire

d). Support for the establishment and delivery of Community Led Housing Developments

e). Funding to relieve pressure across homelessness through increasing housing acquisitions.

Further details of the nature of, and rationale for these initiatives, were set out in the report. They are all measures which are designed to increase the supply of affordable housing, or which will otherwise help to meet local housing needs, and which are therefore consistent with the recommendations contained in the guidance.

Whilst progressing, there have been some delays in delivery of the affordable housing programme. These include:

Delays in obtaining planning permission for the Solva Community Land Trust development and Welsh Water investment in improving the sewerage infrastructure
Delays in receiving Welsh Government approval for utilising the premium income to build and purchase houses which will become part of the Council’s Housing Revenue Account (HRA). Recent correspondence from Welsh Government has stated that the Cabinet Secretary has agreed to officials drafting the instrument to allow Welsh Ministers to issue a Direction that would enable local authorities to transfer certain funds from the General Fund into the HRA and consult with local government on its principles. This will give Local Authorities the option to utilise the Council Tax premiums towards increasing the supply of social housing owned and managed by the HRA.

Pembrokeshire are piloting the application process with Welsh Government to enable utilisation of an element of this funding towards bringing forward package deals/off the shelf developments as well as our own pipeline developments in order to expedite the numbers of social homes available in the county.

A Homebuy Pembrokeshire affordable housing product was approved by Cabinet on 17 March 2025, with an initial £3m allocated towards the scheme.

The funds for affordable housing programme works are held in the ‘Affordable Housing’ reserve and the ‘Bringing Homes into Use’ reserve.

Enhancing Pembrokeshire Grant Scheme

Funding for the Enhancing Pembrokeshire grants scheme has been provided from the Council Tax premiums for second homes and long-term empty properties at varying percentages.

This scheme provides grants across Pembrokeshire to enhance the sustainability of local communities and address problems caused by long-term empty properties and second homes.

The funds for these works are held in the Enhancing Pembrokeshire reserve. For 2025-26 Council recommended that 2% of funding was provided for the Enhancing Pembrokeshire grants scheme from the Council Tax premium for second homes.

Welsh Language

Welsh language background information has been provided to support respondents to answer the question on the effects of the proposals on the Welsh Language.

Across Pembrokeshire, around 17% of people say they can speak Welsh, but the percentage who can do so varies considerably from 59% to 6% with communities in the north east of Pembrokeshire consistently having the highest percentages. There is very little correlation between the percentage of people who speak Welsh and the percentage of properties that are second homes or holiday lets in Pembrokeshire’s communities. Some communities with high levels of second homes/holiday lets (such as Newport) also have relatively high number of Welsh speakers. Other areas with high levels of second homes/holiday lets (such as Tenby and Saundersfoot) have relatively low percentages of Welsh speakers. This means that the impact of different options for the council tax premium on the Welsh language is not obvious from Census or administrative data.

As part of the 2024 Council Tax Premium consultation, many have shared their views on the impact second homes council tax may have on the Welsh language. Example comments are used to demonstrate both negative and positive effects.

Some respondents thought charging a second home premium damaged the Welsh language:

Shrinking the tourist market in Wales will reduce exposure to Welsh language
If the local economy suffers from a reduction in tourism, people will likely have to move away to find work. These changes will, I fear, have the opposite effect of reducing the Welsh language as younger generations move away for work.
We speak Welsh, we’re from Wales. We attend the local church. You have made us feel unwelcome and stirred up a negative narrative against second homeowners with this one size fits all approach.

Other respondents thought charging a second home premiums promoted or protected the Welsh language

By making second homes less popular, hopefully house prices will drop to the level that local people will be able to afford a house, raise a family and send children to local schools where they will learn and speak Welsh
If such policies can increase opportunities for people to remain in Welsh speaking communities then there could be a beneficial effect. But it is likely to be indirect and hard to manage who lives where.
To enhance the viability of Welsh speaking communities, it is helpful to have the number of empty and second-home properties reduced, so these could be occupied by permanent residents.

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. The Council’s Services Overview and Scrutiny Committee considered a progress report on the Strategy at its 17 June 2025 meeting.

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 its peak of 682 in July 2023 to 317 in March 2025, this is still over twice the number of people the homelessness team were working with in May 2021. In March 2025 the Council had a duty to secure accommodation for 150 households and although 33 people were moved into suitable long-term accommodation that month, we also needed to assess 76 new applications for homelessness assistance. Rough sleeping is the most extreme form of homelessness and in March 2025, 21 rough sleepers were recorded. By comparison in March 2023, there were only two people.

The supply of new housing impacts on affordability. Within the PCC planning area, 283 new homes were built in 2023-2024 which is well below pre-COVID house completion averages. Within the National Park there were 52 completions which is within their target in their Local Development Plan. Looking more specifically at affordable housing, in 2023-24 there were 120 new affordable homes completed in the Council planning area with a further 27 within the National Park.

Whilst the combined social housing stock of the Council and the three registered social landlords who operate a joint housing register in Pembrokeshire has increased by 4.4% since COVID it is not keeping pace with demand. The number of people on the highest priority Gold band in March 2025 was 1,320 lower than in previous years, but to put this in context on average only 10 new tenancies from the general register started each month in 2024/25.

House prices in Pembrokeshire have changed little over 2024-25 based on land registry price paid data and in January – March 2025, the average price for all types of houses was £240k. In September 2024 the house price/income ratio in Pembrokeshire was 6.7 to 1. This is above the Wales-wide average of 5.9 to 1 but below the England average of 7.7 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. These concentrations are typically within the area covered by Pembrokeshire Coast National Park.

ID: 13672, revised 16/07/2025