Young families are being priced out of the housing market, as second home owners are using a legal loophole to avoid paying council tax, according to Assembly Member for Arfon Siân Gwenllian.
Siân Gwenllian and Dwyfor Meirionnydd Member of Parliament Liz Saville Roberts have now called on the Welsh Labour Government to clamp down on the 800 second home owners in Gwynedd who are avoiding council tax on the properties.
The loophole allows second home owners to register their properties as small businesses, making them exempt from paying both council tax and business rates. This, at a time when there are 2,000 families currently on the housing waiting register in Gwynedd.
Arfon AM Siân Gwenllian has now written to the Welsh Government calling for an urgent review and for a clampdown on second home owners exploiting the system. Siân Gwenllian AM said: “There are now 5,000 second homes in Gwynedd – more than in any other county in Wales. Undoubtedly some second home owners contribute to the local economy, but many spend very little in our shops and businesses.
“But 800 second home owners are now exploiting a legal loophole to avoid paying any council tax at all by registering their properties as small businesses. To rub salt in the wound, they are also exempt from paying business rates as a result of an anomaly in the system.
“To qualify as a ‘business’, the second home must be available to let for 140 days a year. How that is monitored is unclear and I hear stories of second home owners openly flaunting this rule, or ‘letting’ the property to family or friends.
“This is scandalous, and the loophole needs to be closed. Whilst this unethical practice is allowed to continue, I have constituents coming to see me desperate to move to social housing from unsuitable accommodation.
“Buying a house is not an option for those on the housing waiting list and, in some areas, the high percentage of second homes has even slowly pushed up house prices beyond the reach of local families on what can be described as decent salaries.”
Liz Saville Roberts MP said: “The impact of second homes in my Dwyfor Meirionnydd constituency cannot be underestimated. I know first-hand how frustrating it is for young people to be priced out of the market in their own community.
“Second homes drive-up house prices beyond the reach of local salaries. If this trajectory persists then more families and young people will be priced out of their local communities leading to hugely damaging implications for community life.
“Whilst local councils are forced to increase council tax to plug the shortfall in their budgets, it’s completely unacceptable that some are able to benefit from local services whilst paying nothing into the local coffers.
“It is only right that questions are asked as to why Welsh taxpayers are having to subsidise those who own second homes.
“Housing, planning and business rates are devolved, and the Welsh Labour Government must use their powers to address the deep inequality of which the second home market is a stark symbol in many rural and coastal communities.”