High Council Tax and mortgage rates are making holiday homes unaffordable – leaving the market flooded with cottages no one wants to buy say Rachel Mortimer and Jack Simpson.
….Local Authorities in Wales have been able to charge extra council tax on second homes and vacant properties since 2017. … A glut of properties has stalled the market in some of the most popular second home spots – where buyers fell over themselves in the rush to buy holiday boltholes in the pandemic. But there is now little demand and in October the government made them even more expensive, raising the stamp duty surcharge on additional properties from 3 percent to 5 percent.
Carol Peett from West Wales Property Finders said: “Second home buyer numbers have fallen off a cliff and so properties are just siting on the market”.
“This does not help locals buy properties and anyway often they are totally unsuitable for full time living because they are chocolate-box cottages – wonderful for use in Summer for a holiday but dark, damp and cold in Winter with no storage, gardens or parking”.
Until recently second homes sold quicker than main residences, but that has reversed thanks to council tax and high mortgage rates. …..
…Wales may have led the way in charging extra on second homes but in some areas authorities have been forced to relax the rules after a local backlash and economic concerns. In Pembrokeshire, where almost 8% of the properties on the market are second homes, councillors voted in October to reduce the Council Tax premium from 200 per cent to 150% – just six months after it had been introduced.
Peett said: “Second-home council tax rises are having a devastating effect on the local economy in West Wales and the number of second homes on the market is enormous. Here in Pembrokeshire local businesses were hit very hard by the lack of second-homers, who are the ones who come down and have money to spend in the local cafes, restaurants, shops and on tourist activities.”
“It has also hit the wider workforce like cleaners, builders, plumbers and taxi drivers”….
The Sunday Times, 6th July 2025 – https://www.thetimes.com/business-money/money/article/second-home-owners-tax-trap-pn2ghhtkd?msockid=24f799b79ef86c9b2c068b499f936de5
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