Estate agents slam Welsh Stamp Duy hike plans for second homes
Agents have slammed plans by the Welsh Government to increase Stamp Duty (or LTT in Wales) in areas with large numbers of second homes.
But some 85% of respondents to the consultation backed the bumper tax grab on owners of second homes and holiday lets.
Also, agents’ concerns were brushed aside in response to the consultation on the assumption second homeowners “can afford to make a financial contribution to the communities in which their property is impacting”.
The Welsh Government has already introduced a range of measures to address the issue of second homes, including giving councils the discretionary power to increase council tax premiums on second and empty homes and it has changed the rules on holiday lets so owners and operators make a fair contribution to their local communities.
But critics argue these latest proposals could not only be seen as anti-English but also that second homes and holiday lets help local economies, boosting tourism, creating well-paid job opportunities that help locals get a step on the housing ladder – including within sales and letting agencies.
They also point out that affordability is not as challenging in some parts of Wales that are attractive to tourists as elsewhere and that second homeowners are often those that have moved away from the community for work-related reasons.
The tax hikes could also impact on the resale value of properties used by local people as part of holiday letting businesses. This is a concern for those who intend to sell properties as part of their retirement planning.
Supporters of local LTT variation argue that second home and holiday lets have a negative impact on local communities – pricing some would-be buyers out of their local area and forcing them to move away.
They also want stricter planning regulations limiting second homes to protect the local rental community as well as licences for holiday letting with stringent regulatory standards.
In its own response to the consultation, Propertymark says: “We do not consider the additional complexity of a varied higher rate of LTT at any local level to be a practical mechanism to manage second home ownership.
“We have also highlighted the requirement to close the Small Business Rates Relief loophole that presently enables some short-term holiday let businesses with premises valued at up to £6,000 to pay neither council tax nor non-domestic rates.
“Such mechanisms have the potential to be more targeted, localised and effective ways of tackling some of the negative consequences of second home ownership and short-term let activity and we would urge the Welsh Government to refine these levers before committing to complex changes to LTT that could have a detrimental impact on property investment in Wales.