SECOND home owners will not be charged a council tax premium for one year if they had previously been paying business rates, a council has agreed. 

A decision in March last year approved a plan that owners of second homes and holiday lets in Monmouthshire would have to pay double the council tax with a 100 per cent premium charged from this April and a sliding scale, up to 300 per cent, applying to long term empty properties. 

But it was agreed to review charges on second homes ahead of the policy being imposed this April to consider its impact on tourism and a change in Welsh Government regulations. It now requires self-catering holiday homes to meet a threshold of having been booked for at least 182 days in the previous 12 months to qualify to pay for business rates rather than council tax. 

Cllr Ben Callard, the Labour county council cabinet member responsible for finance, said most of the second homes are in the lower council tax bands and said: “These are not massive mansions but could be additional family homes we are in dire need of in Monmouthshire. 

“The purpose of the policy is not to raise revenue but bring empty or under-used homes into use. Any revenue raised will be ring fence to be used to address the housing shortage.” 

He also said some empty properties have, since the council agreed the premiums plan, been returned to the housing market and said the council’s housing options team can give help and advice to any owner on how to bring their property back into use. 

Conservative opposition leader Cllr Richard John said it would oppose charging the premium but support the cabinet’s recommendation that a 12 month grace period be allowed for properties moving from business rates to council tax from April. 

He described the premium as “another kick in the teeth for the tourism industry in Monmouthshire.” 

The Mitchell Troy and Trellech member said the premium would be applied retrospectively and said: “There’s a serious risk many self-catering operators in Monmouthshire will be given retrospective bills for thousands of pounds. These are not multi-million pound companies but small traders and some individuals of very limited means and you risk giving them significant bills.” 

The councillor said the higher threshold to qualify for business rates, introduced in April last year, that increased the minimum a property has been let, from 140 days, penalised businesses that had been impacted by Covid regulations and owners who had maintained free days between bookings as a precaution. 

He also said the policy would make holidays more expensive than “just across the border in the Forest of Dean.” 

Abergavenny Labour member Tudor Thomas called the premium a “step in the right direction” and that Monmouthshire is “difficult place to live” for those on lower incomes and said it “must be hell” for families who have had to be housed in hotels. 

Labour member for Chepstow Dale Rooke said there were 370 families in the town looking for accommodation and though the policy may only slightly increase the number of homes he would support it. 

Shirenewton Conservative Louise Brown said she understood some holiday lets were being used as temporary homeless accommodation and asked if that had been considered. 

Cllr Callard said properties may move between business rates and council tax, year to year, based on occupancy rates and said their value could be greater to the local economy from being permanently occupied if the threshold for tourism accommodation, which he said works out at six months, isn’t met. 

Figures produced by the council show self-catering operators account for 64 per cent of Monmouthshire’s total tourism operators and it’s anticipated as many as 176 self-catering businesses will now be subject to council tax, and the premium, with a number having previously received business rate relief and not had to make any payments. 

Conservative councillors Fay Bromfield, Rachel Buckler and Jayne McKenna all declared an interest and left the chamber during the discussion. 

Properties restricted by planning conditions for use as holiday lets are among those exempt from the premium.