Landlords and owners of multiple properties in Swansea are reeling from the news that their council tax bills are set to double.

Wales Online published an article last week outlining Swansea Council’s proposal to increase council tax on empty and second homes by 100%.

Swansea has around 1,100 second homes that will fall into this new council tax premium bracket – the majority in Gower, Swansea West, and Swansea Marina. Nearly half of their owners are people who live in the county, and who are currently charged council tax at the normal rate.

There are around 2,340 long-term empty properties in Swansea.

“Severe Stress”

Currently, landlords of empty properties receive 6-month council tax exemption period, after which they pay half of the full council tax charge.

The empty home premium is set to be introduced from April 2020. The initial 6-month exemption period would remain, and be followed by 6 months at the standard council tax rate. Once the property had been empty for 12 months, the additional 100% charge would kick in.

The second home premium would come into force in April 2021.

There could be up to a year’s grace for owners actively marketing second homes or empty properties for sale or let.

Council Leader Rob Stewart said: “What the Council is aiming to do, in common with other local authorities in Wales, is to encourage more properties to be brought back into use for the benefit of local people looking for a decent place to live.”

He said council budgets were under “severe stress” – and at a time when there is increasing pressure for more affordable homes.

Backlash

Swansea Council conducted a survey this summer of which 70% of respondents (many second-home owners) opposed any second home council tax premium. 76% disagreed with a doubling of the charge.

One opponent to the second home council tax idea said: “If our taxes are doubled we will simply sell and spend our vacation time elsewhere and so local businesses will suffer.”

Just over half of those who responded to the survey said they backed a new empty homes’ premium, but less than half felt it should be a 100% hike.

Despite the backlash, Swansea Council are still keen to go ahead with doubling council tax for owners of properties which have been empty for more than 12 months.

Opponents of the empty home premium idea said the properties may only be empty because the owners couldn’t afford to refurbish them, while another said: “It is not up to the council to tell people how to use their private property.”

Tenant Liability

Councillor Andrea Lewis, Cabinet Member for Homes and Energy, said people who owned more than one property would not be affected if the house was occupied by a tenant, as the tenant would normally be liable for the council tax.

Referring to the £2.8 million that could be raised, she said: “The Welsh Government is encouraging local authorities to plough back the funds into supporting work with households and rough sleepers seeking a place to live as well as supporting owners seeking to bring empty properties back into use and meet other housing needs.”

As the Swansea City Centre redevelopment work is beginning to take shape, and following the excitement of rising property prices in Mumbles (19% in the last year) and its inclusion in the Sunday Times Best Places to Live Guide 2019, investors are jumping on the Swansea-investment bandwagon.

Although we’re always at the mercy of the market, a proactive marketing strategy is essential for minimising void periods – and avoiding making yourself liable for a hefty council tax bill!

Sources: Wales Online

Related: Rents Increase as Tenant Fee Ban Hits / Pros and Cons of Zero Deposit Schemes