OPINION: Labour’s second home premium is a “wealth tax”

Janet Finch-Saunders AM:

Welsh Labour’s ‘empty home premium’ is a spiteful wealth tax and despite their lofty claims, it will add nothing to the affordable housing supply.

Let’s be clear, this is just a money spinner – a direct tax on people with second homes, many of whom already pay twice for services they rarely use.

Last Week Plaid’s Police & Crime Commissioner, Arfon Jones, waded into the debate, racing to Labour’s defence. His rather bizarre tweet that taxing second homes isn’t an “abuse of human rights” raised eyebrows; no one ever said it was! And it’s not clear where this falls into his remit as a PCC anyway.

I should stress that I have nothing but support for initiatives to help the homeless into sustainable, secure accommodation, but Labour’s new wealth tax won’t do anything of the sort.

There are an estimated 32,000 empty or derelict properties in Wales, yet the Welsh Government’s ‘Houses into Homes’ strategy has converted just 7,560 of them into use over the last four years.  

Instead of treating second home owners like a cash cow, they should revise this unambitious strategy and target their resources more effectively.

The Housing (Wales) Act 2014 allows local authorities to charge a premium of up to 100% on the standard rate of council tax for long-term empty properties and second homes, from April 2017. Worryingly, though, the flexibility in the scheme will lead to inconsistency and ambiguity across Wales.

It also adds little to collective understanding of why a home is empty, because every empty home has its own story to tell: what about a family that is having difficulty selling on the inherited home of a late relative – a situation which may already be causing stress and concern?

And what of the property developer, doing up a derelict home for the rental market – but who’s found that the works may take longer than a year to complete?

How many home owners will be unfairly penalised under this poorly conceived scheme?

Surely it is better to give Homes Officers the leeway to look into why homes are empty, and to work closely with owners to bring them back into use. Denbighshire employs such a system and is recognised as the top authority in England and Wales for bringing empty properties back into use.

Returning to second home owners, the Act makes no provisions for those who already pay full council tax for services for which they are rarely present.

Many second home owners already own their main home in Wales, and increasing council tax premiums to such an extent unfairly penalises those who are already investing in Wales.

Let’s call it what it is: a punitive wealth tax. A tax on the life savings of those hardworking families who already pay council tax on more than one home, and who are now being penalised for investing their life-savings into property.

If Labour Ministers really want to improve the Welsh housing market, they should also be engaging with housing providers and identifying and removing the barriers to increased activity.

We need an Empty Homes Strategy that runs alongside a broader package of reforms for house building and renting in Wales – including working with social landlords to target areas where market supply can’t meet need, working with the private rented sector to develop social letting agencies as social enterprises to meet the needs of the hardest to home, as well as protecting ‘Right to Buy’, thereby releasing more capital to build social homes.

The Welsh Government’s Social Housing Stock and Rents report recently highlighted the lack of social rented housing stock, which has seen a pitiful increase across Wales since 2011. In the first three Assembly terms, Welsh Labour cut the number of new social rented homes by a whopping 71%, and recovery in this area is still painfully slow. Local Authorities need to focus on these problems, rather than the folly of exorbitant Council Tax Premiums.