UK Government plans to tighten a loophole enabling second home and holiday let owners in England avoid paying council tax should prompt ministers in Wales to take further action, it has been claimed.

The issue of second homes is prevalent in communities across North Wales, with holiday properties and holiday lets now making up over 10 per cent of Gwynedd’s entire housing stock.

But while Welsh Government has been urged to act, with a recently commissioned report outlining 12 potential steps to reduce the pressure on the local housing market, any potential for action has been halted until after May’s Senedd Election.

Gwynedd Council has already decided to lodge the maximum permitted premium of 100 per cent on second homes in the county – essentially doubling what would be paid in council tax if it were a normal dwelling. Most other authorities have resisted following suit due to fears it could prompt more of their owners to ‘flip.’

Under current legislation people can avoid paying council tax on their properties by registering them as businesses and then stating they do not earn enough as holiday let businesses to require them paying business rates – thus making no direct contribution towards local services in the areas where they own properties.

In England a holiday let is currently liable to pay business rates rather than council tax when the owner declares they intend to make their property available to let for at least 140 days in the coming year.

But there is no requirement for business rates purposes to undertake checks to verify they are actually commercially rented out.

In Wales, however, there is an added compulsion for the property to actually be let out for 70 days for it to meet eligibility criteria.

According to Whitehall, of the over 60,000 holiday lets currently on the business rates list in England, around 96 per cent have a rateable value which would likely qualify them for Small Business Rates Relief and as a result pay no business rates at all.

A spokesman said: “The change announced will ensure owners of properties that are not genuine businesses are not able to reduce their tax liability by declaring that a property is available for let but make little or no realistic effort to actually let it out.”

But according to the leader of Gwynedd Council, the fact UK Government feels the need to take action should also prove the need for further measures in Wales.

Cllr Dyfrig Siencyn said: “England are taking these measures now that will essentially bring them in line with those already in place in Wales.

“One would assume their compulsion for doing so is that they see how much money is being lost due to such a loophole being already in place.

“As a council we have consistently argued our legislation in Wales needs further amendment, which would provide many more millions of pounds to provide homes and meet the urgent housing needs of our communities.”

According to the Welsh Government there is “specific letting criteria which owners must meet for their property to be treated as self-catering accommodation”.

But in Senedd last month, the housing and local government minister hinted at further potential action.

Julie James said: “We are looking very carefully to see whether that number of days - 70 and 140 - should be extended.

“And we’re also looking to see what can be done about access to small business rate relief by people who do that, because that’s another issue.”

Adding there was a “real complexity about what we call second homes and who occupies them,” she concluded: “We are looking at a range of pieces of evidence to see where that would best be placed, and what arrangements people who do flip to business rates have to do in order to be a business in order to do that.”