New planning rules and licensing scheme for second home and holiday accommodation in Wales

The Welsh Government have announced new planning laws, a statutory licensing scheme and proposals to change land transaction tax as part of a package of measures aimed at addressing numbers of second homes in Wales.

First Minister Mark Drakeford and leader of Plaid Cymru Adam Price set out the next steps in a programme of actions to help create thriving communities and to support people to afford a home, in a joint press conference today (Monday 4 July).

The Co-operation Agreement between the Welsh Government and Plaid Cymru includes a commitment to tackle the issue of second homes affecting many communities in Wales.

The package of measures being announced today includes changes to planning regulations by the end of the summer. These will introduce three new planning use classes – a primary home, a second home and short-term holiday accommodation. Local planning authorities, where they have evidence, will be able to make amendments to the planning system to require planning permission for change of use from one class to another. The will also be changes to national planning policy to give local authorities the ability to control the number of second homes and holiday lets in any community.

Also announced were plans to introduce a statutory licensing scheme for all visitor accommodation, including short-term holiday lets, making it a requirement to obtain a license. The Welsh Government say this additional regulation will help raise standards across the tourism industry.

Following a consultation about varying land transaction tax (the Welsh version of Stamp Duty) locally in areas with large numbers of second homes, the Welsh Government announced that work will start today (Monday 4 July) with local authorities to develop a national framework so they can request increased land transaction tax rates for second homes and holiday lets to be applied in their local area.

The Welsh Government say they have already introduced a range of measures to address the issue of second homes, including giving councils the discretionary power to increase council tax premiums on second and empty homes and it has changed the rules on holiday lets so owners and operators make a fair contribution to their local communities.

First Minister Mark Drakeford said: “We are today setting out the next steps in a radical programme to ensure everyone has the opportunity to afford to live in their local community – whether that’s buying or renting a home.

“We have a shared ambition for Wales to be a nation of thriving communities – a country where people do not have to leave to find good and rewarding work and a country which people want to come to visit and to live.

“Tourism is vital to our economy but having too many holiday properties and second homes, which are empty for much of the year, does not make for healthy local communities and prices people out of the local housing market.

“There is no single, simple solution to these issues. Any action we take must be fair. We do not want to create any unintended consequences, which could destabilise the wider housing market or make it harder for people to rent or buy.”

Plaid Cymru Leader Adam Price said: “We are committed to using a range of planning, taxation and property levers to tackle the issue of second and unaffordable homes – and to do so with urgency.

“The package of purposeful measures that have been developed as a result of the constructive cooperation between Plaid Cymru and the Government in this area will, together, begin to address the injustices in our housing system and make a real difference to people and communities right across our nation.

“The aim is to give everyone ‘yr hawl i fyw adra’– the ability to live and work in the communities in which they grew up.”