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Pembrokeshire County Council collected an estimated £12.5 million from second home council tax premiums over the past year, even after cutting the surcharge.
During a recent meeting, local councilors revealed that second homeowners in Pembrokeshire contributed an estimated £12.5 million in extra council tax payments over the past 12 months. The figure follows a policy change that reduced the second home council tax premium from 200% to 150% last October.
Initially introduced to address housing shortages and local affordability, the premium remains a significant revenue source for the council. However, the 200% to 150% adjustment will reduce annual income by £2.6 million.
Why the Reduction?
Council members agreed to lower the premium after just six months at the 200% rate, reflecting concerns from property owners and local stakeholders.
When questioned by a member of the public about whether the tax was being used primarily to raise revenue, council representatives stated that increasing the tax base was not the purpose and that the revenue generated was merely a consequence of the policy.
Policy Context
- Original Premium: 200% on second homes (implemented April 2023)
- Current Premium: 150% as of October 2023
- Estimated Lost Revenue Due to Rate Reduction: £2.6 million
- Revenue from Premiums (Past Year): £12.5 million
Wales’ local authorities have been granted discretion to apply up to a 300% council tax premium on second homes under Welsh Government legislation, intended to address housing availability and community sustainability.
The Bigger Picture
Pembrokeshire, a popular coastal region, has one of Wales’s highest concentrations of second homes. The debate over council tax premiums continues to reflect a broader tension between economic reliance on tourism and the need to preserve affordable housing for full-time residents
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