Pembrokeshire County Council, which had previously tripled council tax on second home owners in April this year, has now voted to reduce it slightly just six months later. The council will decrease its council tax premium from 200% to 150% due to concerns about its impact. Businesses have raised complaints that the significant council tax hike on second homes was deterring people from holiday destinations like Tenby. During a meeting on October 17, councillors agreed to the reduction. It was highlighted that such changes could cost the council between £2.6m and £5.2m, potentially resulting in an overall council tax increase of up to 18.8% next year.
Currently, Pembrokeshire is expected to see an 11.14% rise in council tax in the upcoming financial year. Since the start of this financial year, owners of second homes have been paying a 200% premium on their council tax, effectively tripling the rate compared to the previous 100% premium. According to Welsh Government legislation, local authorities have the authority to raise the council premium on second homes to as high as 300%, effectively quadrupling the rate. Additionally, long-term vacant properties in the county are subject to premium council tax rates, ranging from 100% after 24 months to 300% after five years.
At the October 17 meeting, council members were advised to retain the current 200% premium for second homes and keep the long-term empty property rates unchanged. They also planned to write to the Welsh Government seeking a reduction in the 182-day criteria for holiday lets rate relief. During the meeting, alternative proposals for a lower second homes premium rate were presented, including a 100% premium suggested by Conservative group leader Cllr Di Clements and a 150% premium proposed by Independent Group (IPG) leader Cllr Huw Murphy. The decision to reduce the premium to 100% would lead to additional financial pressures on the council of £5.2m, potentially resulting in a forecasted council tax increase of 18.87%, surpassing the expected general increase of 11.14%.
Cabinet member for finance, Cllr Joshua Beynon, supported the original recommendations, emphasising the financial challenges faced by the council and the pressure on service demands. Despite the defeat of the amendment by Cllr Clements, Cllr Murphy’s amendment for a 150% premium was eventually approved. A subsequent proposal by Cllr Alan Dennison to amend the empty property premium to 300% after two years was deferred for consideration by the council tax working group before being discussed at the Cabinet’s December meeting. The councillors also agreed to send a letter to the Welsh Government, urging a reduction in the 182-day let threshold for holiday homes.