Agenda item

Councillors Bryan Davies, Gareth Davies, Marc Davies, Meirion Davies, Wyn Evans, Gareth Lloyd and Matthew Vaux were given dispensation to speak and to vote on this item. 

 

Councillors Ifan Davies and Chris James were given dispensation to speak but not to vote on this item.

 

Councillor Catrin M S Davies was given dispensation to speak and to vote on matters relating to second homes and to speak but not to vote on matters relating to long-term empty properties. 

 

Councillor Gethin Davies and Eryl Evans withdrew from the meeting for the duration of the discussion. 

 

Councillor Bryan Davies, Leader of the Council and Cabinet Member for Democratic Services, Policy, Performance and Public Protection and People and Organisation presented the report to Council noting that on the instruction of Cabinet, a 6 week formal Public Consultation on the future level of Council Tax Premiums on both Long Term Empty Properties and Second Homes in Ceredigion was held between 18 September and the end of October 2023, and that a Cross-Party Working Group was also established.  Cabinet considered the findings of the consultation and comments received from the Cross-Party Working Group and agreed the recommendations. It was noted that if an increase to the Council Tax Premiums was agreed by Council, Members would need to agree what to do with any additional income at a future meeting, and that in terms of timing there would be a phased approach reviewed continually in terms of the number of houses being available, and the number of homes returning to the stock of available homes.  He noted that potential income has not been a consideration in bringing the recommendation to Council and noted that housing affordability for young people was a consideration, which also impacts upon the Welsh language if people cannot afford to live in their communities. 

 

Councillor Gareth Davies noted that Council decided in March 2016 to increase the Council Tax premium on Long Term empty properties and Second homes in Ceredigion by a premium of 25% from 1 April 2017. He noted that in accordance with legislation, a long-term empty property is defined as a dwelling that has been unoccupied and substantially unfurnished for at least12 months with the furnishing or occupation of a dwelling for one or more periods of six weeks or less not affecting a dwelling’s status as a Long-term empty dwelling. The legislation defined Second homes as ‘Dwellings occupied periodically’ which are substantially furnished but not lived in by a permanent resident.  All references to Second homes therefore are to ‘Dwellings occupied periodically’. 

 

He noted that the report to Cabinet contained information relating to the number of properties in Ceredigion in each premium category, the areas in Ceredigion with the highest concentration / volume of these properties, the age profile of the long-term empty properties in Ceredigion, the Ceredigion Community Housing scheme, the legislative background, and the timeline and associated governance requirements.  He also noted that there were 1,403 responses to the public consultation, which is the second highest ever response to consultations by Ceredigion County Council.

 

Councillor Gareth Davies noted that addressing the issues of second homes, holiday homes ownership and the conversion of residential properties to holiday lets is a key priority within the Council’s approved 2022-2027 Corporate Strategy.   This and increasing the supply and range of options for affordable housing in Ceredigion forms a key part of the Corporate Wellbeing Objective - ‘Creating Sustainable, Green and Well-connected Communities’.

 

Councillor Paul Hinge asked what could be done to ensure a consistent approach in terms of empty homes which that are partially furnished that give the impression of being lived in when they are not.  The Corporate Lead Officer for Finance and Procurement noted that there is always a risk when changing the premium categories, however there is resource within the team and processes are in place to deal with such situations to minimise avoidance measures, but that this is an area where an increase in resources is required.

 

Councillor Gareth Lloyd asked about the impact upon holiday lets if they do not meet the business rates criteria of 182 days’ occupancy per annum from 1 April 2024, whether holiday lets subject to a planning clause which restricts occupancy all year round would be exempt and whether the current arrangements in terms of allocation of income from the premiums would still apply.  These questions were reiterated by several other Members during the discussion.

 

Councillor Gareth Davies noted that the changes relating to the 182 days’ let criteria is as a result of Welsh Government legislation and is not within the control of Ceredigion County Council and that this is policed by the Valuation Office Agency, and it was noted that a Class 6 exemption clause would apply to seasonal homes. The Corporate Lead Officer: Finance and Procurement also confirmed that under WG legislation, the Class 6 Premium exemption now extends to include dwellings restricted by a planning condition which either prevents occupancy for a continuous period of at least 28 days in any one year period or which specifies that the dwelling may only be used for a holiday let or which prevents occupancy as a person’s sole or main residence.   These Premium exemptions would also apply if a property reverts back to Council Tax by virtue of not hitting the 182 days threshold to remain on Business Rates.

 

Eifion Evans, Chief Executive confirmed that determinations relating to the allocation of the 25% premium is a political decision, which will remain in place until 1^st April 2024, and that a political decision would be required at the end of March 2024 as part of setting the budget.  Duncan Hall, the Corporate Lead Officer for Finance and Procurement confirmed that there is currently £1.8million in Community Housing Scheme, and it is anticipated that this will increase to circa £2.5million by the end of the year, which will remain in this scheme.

 

Councillor Gwyn Wigley Evans noted that Ceredigion County Council should raise the premium to its maximum of 300%, in order to keep up with other authorities who have previously increased their rates, as some may decide to move here if neighbouring authorities decide to increase their premiums further.  He noted that due to the current circumstances, we are unable to build, however empty homes do not require planning permission. 

 

Councillor Marc Davies reiterated the importance of supporting young people to remain in their communities, but asked if there was evidence that raising the premium would result in the desired outcomes, as opposed to resulting in the sale of holiday let businesses resulting in more second homes.

 

Councillor Catrin M S Davies outlined the impact in terms of smaller properties being bought as second homes, and the lack of contribution made to the local community and its economy where such properties remain empty for a significant period of the year.  She noted that the 182 day clause did not sit comfortably with her either, however it should be noted that it is a luxury to own two homes when some people do not have anywhere to call home.

 

Councillor Ann Bowen Morgan noted that she agreed with the recommendations, and that an increase to 150% may encourage people to sell their second homes giving others an opportunity to buy.  She noted that 75% of the owners of second homes live outside of Ceredigion, with many of these from England which has a detrimental impact upon the language.

 

Councillor Euros Davies noted that he was more willing to see an increase in premiums on empty properties as several in his ward are falling into disrepair, which de-values neighbouring properties, and a concern that they may be broken into.  Many of these are affordable properties which would be suitable for young people especially with the grants available to bring long-terms empty properties back into use.  People have invested in second homes to develop them as holiday homes and holiday lets employ local people to clean them.  If holiday lets are sold as second homes, this will have an impact upon this employment as they will not require cleaning.

 

Councillor Gareth Lloyd proposed an improvement to recommendation 2, to vote on items a) and b) separately in order to provide an opportunity to review evidence of the impact of increasing the premium during year 1 prior to deciding on a further increase in year 2. This was reiterated by several Members.

 

Councillor Elizabeth Evans also noted that assumptions were being made in terms of decreasing property prices providing opportunities for young people to buy and the impact upon the Welsh language, noting that the opportunity has already passed in Aberaeron and that house prices are high because people want to live there.  She noted that lots of holiday lets are now coming onto the market due to the 182 day rule, and that she had never seen as many houses for sale in New Quay and with tourism being the mainstay in Ceredigion, she did not want to see job losses.

 

Councillor Keith Evans noted that a strong economy is required to keep young people in Ceredigion, however we have failed to do this for decades with people leaving for better opportunities in Cardiff at the expense of Ceredigion.  He noted that he sympathised with people who own second homes as a result of inheritance, however they use these as a place to stay and to contribute to the community.

 

Councillor Alun Williams noted that many of the Members had received letters from second homeowners outlining their contributions to the community but noted that this is not as good as occupancy by full time residents 365 days a year.  He noted that there was a tendency to over generalise who might buy a property, and that is would probably be a mixed picture, however there is an acute housing shortage, with young people struggling to buy, and some living in sub-standard homes and unable to settle down in their communities where others have two.  He noted that this isn’t something that applies to Wales only, and that areas such as Devon and Cornwall and areas in Scotland are also looking to put the premium up by 100%, and that this must be looked at in a wider context.  Any local authority charging significantly less would be placing themselves in a vulnerable position and become a magnet for second home ownership.

 

Councillor Matthew Vaux noted that the Ceredigion County Council planning service will need to look at the possibility of removing the restriction on seasonal homes so that holiday lets can be transferred to all year round residences.

 

It was RESOLVED to vote on items 2a) and 2b) separately, and to remove “and then” from the end of item 2a). 

 

Furthermore it was also RESOLVED:

 

1.     that the existing 25% Council Tax Premium applicable to Long Term Empty Properties will increase with effect from 01/04/24, to:

a)    100% for Properties that have been Long Term Empty Properties for up to and including 5 years.

b)    150% for Properties that have been Long Term Empty Properties for over 5 years and up to and including 10 years.

c)     200% for Properties that have been Long Term Empty Properties for over 10 years.

with all time periods including the initial continuous period of 12 months for a dwelling to become defined as a ‘Long Term Empty Property’ by virtue of it being unoccupied and substantially unfurnished.

 

2a)  that the existing 25% Council Tax Premium applicable to Second Homes will increase to 100% to take effect from 01/04/24.

 

2b)  that the existing 25% Council Tax Premium applicable to Second Homes will increase to 150% to take effect from 01/04/25.

 

3.   To note that any potential financial considerations arising from their decisions will be dealt with as soon as possible as a separate matter at a separate future meeting.