Council Tax premiums for long-term empty properties and second homes

A premium charge is an additional amount of council tax to be paid on top of the normal council tax bill.

Since 1 April, 2017, local authorities in Wales have been able to apply a premium charge on long-term empty dwellings and unoccupied furnished dwellings (more commonly referred to as second homes) in their areas. 

The ability to charge a premium came about because of an amendment to the Housing (Wales) Act 2014. 

Carmarthenshire County Council had to enter a consultation process prior to the decision to introduce a premium charge. The Council Meeting on 8 March, 2023 approved its introduction.

In this meeting it was decided that long-term empty properties and second homes in Carmarthenshire will be subject to a Council Tax premium from 1 April, 2024. 

Please note that the discretion given to Local Authorities in Wales to charge a premium, is intended to be a tool to help Councils to:

• bring long-term empty homes back into use to provide safe, secure, and affordable homes.
• support Councils in increasing the supply of affordable housing and enhancing the sustainability of local communities.

Long-term empty property

The term ‘long term empty’ is a dwelling that is both unoccupied and unfurnished for a continuous period of at least 1 year. Please note that temporary occupation or furnishing of a dwelling of 6 weeks or less will not affect its status as a long-term empty dwelling. Also, where a Council determines to charge a premium on long term empty dwellings, it may specify different percentages for different dwellings based on the length of time for which they have been empty. This enables local Councils to take a stepped approach, with incremental increases applying over time.

Second Homes

A second home is defined as a dwelling which is not a person’s sole or main home and is substantially furnished. These dwellings are referred to in the Local Government Finance 1992 Act as dwellings occupied periodically but they are commonly referred to as ‘second homes’.

There are some exceptions to the premium that may apply from 1 April, 2024:

• Class 1 – dwellings being marketed for sale or where an offer to buy the dwelling has been accepted - this exception is time-limited for one year - see further details.
• Class 2 – dwellings being marketed for let or where an offer to rent has been accepted - this exception is time-limited for one year - see further details.
• Class 3 – annexes forming part of, or being treated as part of, the main dwelling.
• Class 4 – dwellings which would be someone’s sole or main residence if they were not residing in armed forces accommodation.
• Class 5 – occupied caravan pitches and boat moorings (second homes only).
• Class 6 – dwellings where, by virtue of a planning condition, year-round or permanent occupation is prohibited or has been specified for use as holiday accommodation only or prevents occupancy as a person’s sole or main residence (second homes only).
• Class 7 – job-related dwellings (second homes only) – see further details.

Class 1: Dwellings being marketed for sale

This exception applies to both the premium on long-term empty properties and second homes. It excepts dwellings that are being marketed for sale. It also covers dwellings where an offer to buy the dwelling has been accepted but the sale has not yet been completed.

To qualify for this exception a dwelling must be on the market for sale at a reasonable price for that dwelling. A liable owner must demonstrate to the satisfaction of a local authority that they are actively marketing their property for sale at a reasonable price, i.e., what it would reasonably be expected to fetch on the open market.

In considering an application for an exception, a Council may wish to consider a range of factors relating to the sale of dwellings, such as the following:

• how long properties in the area have been available for sale.
• the average price and time on the market of similar properties in the local area
• whether unduly restrictive conditions, such as the price, are being placed on the dwelling to impede its sale.
• any other reasonable factors

To determine whether a dwelling is genuinely on the market for sale a Council may wish to consider different types of evidence which could include the following:

• listing on advertised websites, for example estate agent websites, Rightmove and Zoopla, or evidence of other ways in which the property is being marketed.
• a contract with an estate agent
• estate agent listings or sales particulars if privately marketed.
• an Energy Performance Certificate (required when a property is built or sold)

The exception period runs for up to 12 months from the granting of the exception, but consideration may be given to extend beyond this period, should the property sale have been agreed but not completed beyond the 12 month anniversary of the exception period commencing. The exception would end on the date of the sale of the property. After an exception has ended, a dwelling being marketed for sale will not be eligible for a further exception period unless it has been sold.

Class 2: Dwellings being marketed for let

This exception also applies to both the premium on long-term empty properties and second homes. It excepts dwellings that are being marketed for let. It also covers dwellings where an offer to rent has been accepted but the tenant is not yet entitled to occupy the property because the tenancy has not yet started.

To be eligible for this exception, a liable owner must demonstrate to the satisfaction of a Council that they are actively marketing the property for let at a reasonable price, i.e., the rent the property would reasonably be expected to fetch having regard to the rent raised on comparable dwellings.

In considering whether the exception applies, a Council may wish to consider a range of factors relating to the letting of dwellings, such as the following:

• how long properties in their area have been available for rent.
• the average rent and time on the market for similar rental properties in the local area
• whether unduly restrictive conditions such as the rent is being placed on the property to impede its letting
• any other reasonable factors

For a Council to determine whether a liable owner is actively or genuinely marketing their property for let, a local authority may wish to consider different types of evidence which could include the following:

• a contract with a letting agency
• estate agent listings or letting agent brochures.
• registration and licensing of a landlord and agent for a dwelling being marketed for let, via Rent Smart Wales 
• housing lists of properties being offered for rent provided by Registered Social Landlords
• an Energy Performance Certificate (required when a property is built or let)
• a valid gas safety certificate required for homes being let.

The exception period runs for up to 12 months from the granting of the exception. After the end of the exception period, a dwelling being marketed for let will not be eligible for a further exception period unless it has been subject to a tenancy that was granted for a term of 6 months or more.

Class 7: Job-related dwellings

This exception applies only in relation to the second home premium and applies to dwellings occupied by a qualifying person. The criteria for a qualifying person are set out under Class 7 in Part 1.

In considering eligibility for this exception, a Council may request certain types of evidence, to prove that a liable person is required to live in a job-related dwelling. This could include the following:

• a contract of employment
• a council tax demand notice (to show liability in respect of another property if the main or second home is in the UK)
• tax returns or pay statements.
• Denomination Letter (in respect of a Minister of Religion)
• Ministry of Defence letter or written contract (in respect of the Armed Forces)

If you believe you are eligible for an exception listed, please contact the council tax section by e-mailing: counciltaxpremium@carmarthenshire.gov.uk

What if my property isn't eligible for an exception?

With effect from 1 April, 2024, for long term empty properties, you will be subject to a 50% Council Tax Premium.

From 1 April, 2024 all second homes will be subject to a 50% council tax premium.

If you would like to work with the council to bring your property back into full-time use, we can potentially assist you. You can find details of this help by visiting our Empty Properties page or by e-mailing privatesector@carmarthenshire.gov.uk