Agenda Item No

The Vale of Glamorgan Council


Scrutiny Committee (Housing and Public Protection): 2nd December, 2015


Report of the Director of Environment and Housing Services


Council Tax Charging Policy for Second Homes in the Vale of Glamorgan


Purpose of the Report

  1. To apprise Scrutiny Committee of the current policy in place on Council Tax charges for second homes in the Vale of Glamorgan and the new legislation being introduced from 1st April 2017 as part of the Housing (Wales) Act 2014.


  1. That Scrutiny Committee notes the report.

Reason for the Recommendation

  1. For information.


  1. The Housing Department has recently completed a new up to date Local Housing Market Assessment (LHMA) based on the methodology approved by Welsh Government. A report detailing this assessment is due to be submitted to Cabinet in November, 2015.
  2. The annual net need for affordable housing in the Vale of Glamorgan has to be assessed for a five year period and the results show that an additional 559 affordable homes per annum are required, which equates to 2,795 over five years. These can be broken down into 1,655 social rented homes and 1,140 intermediate homes.
  3. However, based on the current funding available for affordable homes to be delivered by social landlords and the homes being developed on market sites (where planning permission is in place) through planning gain, the LHMA estimates that out of the 2,795 required, only 230 new affordable homes will be delivered over the five years. This will lead to an under provision of 2,565 homes over the period.
  4. In the Vale of Glamorgan there are currently 603 second homes (excluding caravans which cannot be occupied all year round), these are furnished but unoccupied properties where the owners have provided proof that it is not their sole or main residence. These vary in value and banding from A (81) up to I (17). However, 59 of these properties (approximately 10%) have planning restrictions which prevent them from being occupied for at least 28 days in each financial year (Chalets) and 93 of these properties (approximately 15%) have been vacant for less than 6 months and mainly comprise of furnished, rented accommodation where landlords are in the process of trying to obtain new tenants. Together with the following expected exemptions it will dilute the number subject to this second home premium.
  5. The Welsh Government has recently consulted on exemptions from the second homes premium and, if implemented, would prevent the Council from charging premiums on the following types of second homes:-
  • Furnished properties where probate or letters of administration have been granted within the last 12 months.
  • Furnished annexed accommodation which is treated as part of the main dwelling.
  • Furnished properties that are actively being marketed for sale or let for up to two years.
  • Furnished properties where the owner is living in a job related dwelling as their main residence.
  • Furnished properties where the owner is a minister of religion.
  • Furnished properties where the owner is residing in accommodation provided by the Armed Forces.
  1. Whilst local authorities currently have the discretion to charge up to 100% of the Council Tax levy on second homes, the policy in the Vale of Glamorgan is to apply a second homes discount and to charge only 50% of the relevant property band which Officers from within the Finance Department feel is the most financially prudent percentage to apply.

Relevant Issues and Options

  1. It is recognised that second homes can bring benefits to the local economy and the tourism industry, but as they are only occupied for part of the year they may also have an adverse effect on local services and the availability of affordable housing for local people, particularly on the coast and in rural communities where there is a prevalence of second homes.
  2. For these reasons, The Housing (Wales) Act 2014 introduced premiums that could be charged on second homes of up to 100% in addition to the 100% standard rate of Council Tax from 1st April 2017.
  3. The discretion for local authorities to apply the second home discount of 50% will continue from 1st April 2017. If however, the Council was to change its policy and remove this discount, it must give second home owners at least twelve months' notice before it can implement the change (from 1st April 2016). In addition, if the Council increases the charge for second homes to 100%, its Revenue Settlement Grant (RSG) from Welsh Government will be reduced by the same amount. This means that there will be no financial benefit to the Council and a possible risk of lower collection.
  4. If however, the Council makes a policy decision to increase the Council Tax charge to 100% and introduces a premium of 100% making a maximum of 200% using the discretionary powers contained in the new Act, it will be able to retain any additional funds generated. Whilst the decision will remain with the Council on how this funding should be spent, Welsh Government will 'encourage' local authorities to use the additional revenue raised to help them to address their local housing needs.

Resource Implications (Financial and Employment)

12. The Council Tax Section is responsible for charging, collecting and undertaking any required enforcement action for non-payment of Council Tax. Any increase to the level of premiums charged could mean that additional resources will be required within the team to mitigate the effects of increased administration, ICT costs, enforcement resources and attendance at Local Valuation Tribunals to defend the Council at individual case hearings.

Sustainability and Climate Change Implications

13. Ensuring sustainable communities, local facilities and appropriate community cohesion can be problematic in areas with a high density of second homes and this can result in greater burdens on local authority resources not recognised in the core financial distribution formula.

Legal Implications (to Include Human Rights Implications)

14. The local authority discretion to charge additional Council Tax on second homes is contained within the Housing (Wales) Act 2014. Any policy reviews to be undertaken will be accordance with anticipated Welsh Government guidance on exemption categories.

Crime and Disorder Implications

15. The availability of additional good quality affordable housing will have a positive impact on crime and disorder by ensuring that residents of the Vale of Glamorgan have good quality, stable and sustainable homes in which to live and raise their families.

Equal Opportunities Implications (to include Welsh Language issues)

16. The availability of good quality housing will do much to improve the quality of life of some of the most socially and economically disadvantaged people in the Vale of Glamorgan.

Corporate/Service Objectives

17. This report is consistent with the Corporate Objective of the Council regarding


"Vale of Glamorgan residents have access to affordable, good quality suitable housing and housing advice and support."

18. This report is also consistent with the Council's Local Housing Strategy 2015-20 which aims to ensure that 'Vale of Glamorgan residents have access to affordable, good quality suitable housing and housing advice and support'.

Policy Framework and Budget

19. This report is consistent with the Policy Framework and budget.

Consultation (including Ward Member Consultation)

20. This report will apply to all second home owners throughout the Vale of Glamorgan and therefore no individual ward member consultation has been undertaken.

Relevant Scrutiny Committee

21. Housing and Public Protection.

Background Papers

Housing (Wales) Act 2014

Consultation Document: Exemptions to the Council Tax Premium on Second Homes in Wales (Welsh Government 13th March 2015).


Contact Officer

Pam Toms - Housing Solutions and Supporting People Team Leader

Officers Consulted

Nigel Smith - Operational Manager, Exchequer Services

Paul Russell - Revenues Manager

Lori Bigglestone- Accountant

Committee Reports - Legal Services

Responsible Officer:

Miles Punter, Director of Environment and Housing Services