The UK seaside towns in ’embarrassing’ second home tax climbdown | UK | News
Seaside towns in Wales have been plunged into a “deeply embarrassing” second home tax escalation for the second time in a year. Councilors in Pembrokeshire narrowly voted to reduce the second home premium to 125 per cent, after being reduced from 200 per cent to 150 per cent last year. At Thursday’s meeting, Major Mark Carter proposed an amendment to lower the rate to 100%, which received support from Major Di Clements.
But Major Alistair Cameron, cabinet member for corporate finance efficiency, warned councilors that reducing the second home premium to 100% would create a budget deficit of £2.8 million for 2026-27; this is equivalent to a 3% increase in general council tax levels. Conservative Councilor Aled Thomas described the tax break as a step in the wrong direction in bringing affordable homes to the area. He said: “I think this is very embarrassing for the council.
“Many people say the policy is too strict and fails to deliver on the affordable homes the council says it does. “People value the tourism industry in Pembrokeshire and the industry is speaking out about it.
“It has only been a very small number of ideologically driven councilors and Labor Senedd members who have pushed the agenda that second homes are bad. It’s not actually something that is widely accepted here.”
The amendment passed by a narrow margin of just one vote, 26 in favor and 25 against. A 25% reduction equates to a funding gap of around £1.4 million.
Under current Welsh government regulations, second home owners in Pembrokeshire must pay a premium if they do not let their property out for 182 days a year, but this rule may soon change.
Popular seaside towns in the county include Tenby, Broad Haven and Saundersfoot.
Local authorities can increase the council premium on second homes by up to 300%, effectively quadrupling it, under Welsh government legislation.
But the Welsh Government is currently seeking views on two key changes to how the rules will be implemented, aimed at providing extra stability to the tourism sector. One proposal would allow holiday leave holders to take an average of 182 days of leave over several years.
This means that those who narrowly missed out on taking 182 days of leave in the last year will remain at non-domestic rates if they had achieved this on average in the previous two or three years.
The other proposal would allow up to 14 days of unpaid vacation donated to charity towards the 182-day target. Consultations will be open until 20 November, with subsequent legislation scheduled to come into force on 1 April.
