OWNERS of second homes could face a council tax premium of 300 per cent after the Welsh Government gave the go ahead to local authorities to charge more in a bid to tackle the housing crisis.

The maximum level at which local authorities can set council tax premiums on second homes and long-term empty properties will be increased to 300 per cent, which will be effective from April 2023, the Welsh Government announced.

While councils already charge a premium in many areas, the ability to charge more will “enable councils to decide the level which is appropriate for their individual local circumstances,” the Welsh Government said.

“Councils will be able to set the premium at any level up to the maximum, and they will be able to apply different premiums to second homes and long-term empty dwellings,” the Welsh Government added.

Premiums are currently set at a maximum level of 100 per cent and were paid on more than 23,000 properties in Wales this year.

Local authorities opting to apply premiums have access to additional funding, and the Welsh Government has encouraged councils to use these resources to improve the supply of affordable housing.

As well as the new council tax premiums, the Welsh Government has set down new rules self-catering accommodation being liable for business rates instead of council.

Currently, properties that are available to let for at least 140 days, and that are actually let for at least 70 days, will pay rates rather than council tax.

The change will increase these thresholds to being available to let for at least 252 days and actually let for at least 182 days in any 12-month period.

“The change is intended to provide a clearer demonstration that the properties concerned are being let regularly as part of genuine holiday accommodation businesses making a substantial contribution to the local economy,” the Welsh Government said.

Both changes follow a consultation processes including businesses, the tourism industry and local communities.

Rebecca Evans, Minister for Finance and Local Government, said: “These changes will give more flexibility to local authorities and provide more support to local communities in addressing the negative impacts that second homes and long-term empty properties can have.

“They are some of the levers we have available to us as we seek to create a fairer system.

“We will continue to make every effort to increase the supply and availability of houses, as shown by the £1bn of funding to build 20,000 low carbon social homes, contained in the budget I published at the end of last year.”

Plaid Cymru Designated Member Sian Gwenllian MS said: “It is clear that we as a country are facing a housing crisis.

“So many people cannot afford to live in their local areas, and the situation has worsened during the pandemic.

“These changes will make a difference, enabling councils to respond to their local circumstances, and start to close the loophole in the current law.

“It’s a first, but important, step on a journey towards a new housing system that ensures that people have the right to live in their community.

“Through the Co-operation Agreement, we are committed to introducing a package of measures to tackle the injustices in the housing market.

“This announcement is just one part of that wider package.

“Second homes are a symptom of a wider problem - a market that treats property, not as a home, but as a way of making a profit.

“By working across the parties in the Senedd, we will introduce more measures, as soon as we can, to make house prices and rents genuinely affordable for people.”