Pembrokeshire‘s long-running battle over its second homes tax is back — with residents given until 10 August to say what the premium should be from April 2027.
The county’s second homes council tax premium has been cut twice in two years — most recently to 125% last October, by a single vote, despite warnings the reduction would leave a £1.4m hole in the budget.
Now the council is consulting on the rate for 2027-28, along with the premium on long-term empty homes and how the roughly £9m a year the charges raise should be spent.
The consultation’s own supporting data shows why the argument is far from settled.
The number of second homes paying the premium has risen, not fallen — up from 3,690 to 3,778 in a year. The council says this is largely because holiday lets failing the 182-day letting threshold have transferred into the second-homes council tax column.
Pembrokeshire still has the second highest proportion of second homes of any Welsh county, with more than one in five properties in some communities — including Newport, Dale, Marloes and St Brides, and The Havens — not lived in as a main home.
And the money raised has quietly changed purpose. In 2023-24, a quarter of premium income went to affordable housing and the Enhancing Pembrokeshire community grant. This year, 92p in every £1 goes into the council’s general budget — with 6% for affordable housing and 2% for grants.
That shift matters because the legislation behind the premiums has a stated purpose: bringing long-term empty homes back into use and increasing the supply of affordable housing.
On empty homes, the council’s data shows 2,854 properties standing empty across the county — but only 452 of them, around 16%, actually pay the empty homes premium, with the rest exempt or empty for under the qualifying period.
The county’s housing pressures remain stark in the council’s own assessment. The rate of first-time buyers per 100 sales has sat in the UK’s lowest decile for most of the past decade, and homelessness — though easing since 2023 — remains well above pre-2022 levels.
There is evidence the premium is biting, the council says. House prices in communities with the most second homes have fallen for three years running, the proportion of Tenby sales paying higher land transaction tax has dropped from 71% in 2021 to 46% last year, and the share of homes with no usual resident edged down over the past year.
Premium money has funded visible schemes: the Homebuy first-time buyer loan scheme launched last summer — the first in Wales for open-market homes — a £3m commitment to the Solva Community Land Trust, and £5.5m allocated this year towards the council’s own housebuilding programme.
But the tax has faced sustained opposition. In the council’s previous consultations, 47% of second home owners said there should be no premium at all — and hundreds have legally sidestepped the charge by listing properties for sale or rent under a 12-month exemption.
The council’s impact assessment acknowledges the other side of the ledger: self-catering accommodation makes up around a quarter of the county’s visitor bedspaces, and concern about damage to tourism was one of the main reasons councillors cut the rate from 150% to 125% last autumn.
The premium peaked at 200% in 2024-25 after councillors voted for the higher rate in January 2024 — a level that helped the charges rake in £12.5m in a single year. Welsh councils can charge up to 300%; the average second homes premium across the 20 councils that set one is 118%.
Cllr Jon Harvey, cabinet member for corporate finance, said the council wanted to hear from as many people as possible.
“By taking part in the consultation, residents and stakeholders can help shape future decisions and ensure that a wide range of views are considered before any recommendations are made,” he said.
The consultation runs until 12pm on Monday 10 August at pembrokeshire.gov.uk/have-your-say, with paper copies available on 01437 764551. Cabinet considers the results on 5 October before a final decision by full council on 15 October — taking effect from 1 April 2027.
