A wave of outrage is sweeping across Wales as hundreds of second-home and holiday let owners are being hit with unexpected and crippling five-figure council tax bills. The charges come in the wake of a change to business rate rules that was introduced by the Welsh Government last year.
The changes, enacted on April 1, 2023, raised the threshold for holiday properties to qualify for business rates, and thus be exempt from council tax. Previously the property only needed to be occupied for 70 nights a year, now the threshold has been raised to 182. Moreover, the rule was backdated to the previous year, leaving many property owners with unexpected bills and threats of legal action.
Some owners say they received no warning. Others were reportedly given just days to pay. Among them is a 59-year-old holiday let owner in Pembrokeshire, now facing court over a £13,000 bill.
"It's like playing a football match, and midway through the second half the referee says the rules have changed," she told The Telegraph, adding that the situation has cost her countless nights of sleep.
Welsh Labour has come under intense fire for failing to adequately communicate the rule change, with many owners saying they only learned of it after receiving court summonses or demands from local councils.
“I thought it was a mistake when I got the letter,” said Sharon Davies, 55, who owns a holiday home in Tenby.
“There was no clear warning. It feels like a sneaky snake in the grass. If you were thinking of starting a business, you certainly wouldn’t choose Wales now.”
She said she was never informed of the changes and only found a single government notice, published in October 2022 with any mention of the new threshold.
The changes, intended to tackle the housing crisis by reducing the number of properties kept empty or rented out sporadically, have left small business owners reeling.
Those who failed to meet the new threshold are not only liable for backdated council tax, but also for second-home premiums of up to 300%.
Alun Evans, of law firm Beven Buckland, warned that most holiday lets would fail the new 182-day occupancy test.
Alistair Handyside, Chair of the Professional Association of Self Caterers, called the policy “effectively retrospective” and warned that the absence of a comprehensive holiday let database meant many property owners were never contacted at all.
“People are being caught out,” he said.
“Busy small businesses can’t be expected to scour obscure government web pages for major policy shifts.”
The Valuation Office Agency (VOA), which handles the reclassification of properties, insists it did send letters to all affected owners in October 2022 and worked with local councils and industry groups to raise awareness.
However, local authorities, now tasked with recovering the unpaid taxes, say they only act on information passed to them by the VOA.
“When the council receives notifications from the VOA, it is obliged to act,” said a spokesperson from Gwynedd Council. “Until then, the communication is between the property owner and the valuation office.”
