Holiday let owner says legislation will 'destroy me'

A man who runs four holiday cottages on his property said he will be "forced into bankruptcy" if he ever retires because of rules on holiday lets introduced by the Welsh government three years ago.

Paul Martin, who lives near Newtown in Powys, said the cottages, two of which are "restricted to holiday use", are "very close" to his home making them unsuitable to be sold as separate residential homes.

But under the law, self-catering holiday accommodation that is not let for 182 days a year can be treated as a second home and subject to council tax, in some cases at a premium rate.

The Welsh government said "many operators are exempt from the premium rate" if their property has a restriction and from April 2027 properties being transferred into council tax will have a year at the standard rate before becoming liable for a premium.

Martin said he faces paying five sets of council tax this year, two at a premium of 75%, adding that his business was "unsellable" as a result.

"This legislation will destroy me," he said.

"I can't see anyway to meet these costs when I retire."

He moved to the site with this wife and two children in 2007 and runs the main family home as a bed and breakfast.

He said he invested all his savings and borrowed money to build the cottages from ruined outhouses and barns on the property.

He added that he feels his only option is to "dismantle the cottages and render them unhabitable" by removing the kitchens and bathrooms.

"After all my investment and hard work, it is heartbreaking."

Martin believes the legislation is flawed because it does not contain a definition of what counts as a second home.

"I do not have four second homes in my garden," he said.

Liz Molyneux, who is also based near Newtown, is already paying a council tax premium on the annexe attached to her home.

This year's bill is more than £4,000.

The previous owner had rented it as a holiday let and she continued to do so for a brief period.

She is having to resume using it for holiday rentals just to cover the council tax bill.

There is no way it can be a second home," she said.

"Its electricity runs through my house, its water runs through my house, its oil comes from my oil tank - the two properties are integral."

Powys council said decisions on whether a property is liable for council tax are not made by the council and "where a property is placed on the council tax list, the council is legally required to charge that amount".

But the council has discretion to consider reductions in cases of "genuine hardship" and the cabinet recently considered the impact of backdated premium rate bills on some owners.

It has recommended "a discretionary exemption" from the 75% backdated premium "which is progressing through the council's formal decision-making process".

Previously, properties made available for let for at least 140 days - and actually let for 70 - qualified for lower business rates rather than council tax.

That system still operates in England.

However, in Wales properties now need to be made available for at least 252 days and actually let for 182.

If not, they can be classed as second homes and liable for council tax - which in some areas means paying an additional premium.

The rule was part of legislation designed to strengthen measures trying to tackle an affordable housing shortage in parts of Wales popular with tourists and second home owners.

Some changes have just been introduced allowing tourism operators who narrowly miss the 182 day threshold to use an average over multiple years to hit the target.

Owners will also be allowed to donate up to 14 days of free holidays to charity to reach the 182 day target.

Owain Meirion, chair of Cymdeithas yr Iaith, the Welsh language society, said measures to address the housing shortage facing local people were important to protect the Welsh language and culture.

"An excess of second homes competing with local buyers is a direct threat to the future of the language and measures to deal with that should be welcomed.

"Governments could look at knock-on effects that aren't desired but they shouldn't override the general principle of the legislation," he said.

Welsh Labour said: "We believe everybody should have access to a decent, affordable home to buy or rent in their own communities so they can live and work locally.

"We are using the planning, property and taxation systems to achieve this as part of a joined-up package of solutions to a complex set of issues."

Reform UK said: "The 182 rule for holiday lets has caused serious damage to small-scale operators, retirees and family businesses.

"We will lower the threshold in consultation with the industry so genuine holiday lets are not driven out of the market."

Plaid Cymru said the wider impact of the rule on residents and businesses "must be carefully considered and evaluated in order to avoid or mitigate unintended consequences, adding they had argued that exemptions should be introduced.

"Plaid Cymru's priority is to deliver more genuinely affordable homes for local people."

The Welsh Conservatives said: "The 182 day rule has caused considerable concern across the tourism sector.

"The Welsh Conservatives have previously made it clear that the current 182 day threshold is too high and that a threshold closer to 105 would represent a more proportionate and realistic requirement for many providers."

Wales Green Party and the Welsh Liberal Democrats have been asked to comment.

Additional reporting by Craig Duggan

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