- cross-posted to:
- unitedkingdom@feddit.uk
- cross-posted to:
- unitedkingdom@feddit.uk
geteilt von: https://sh.itjust.works/post/38301389
To try to tackle this, the Welsh Labour government, alongside Plaid Cymru, introduced measures to curb second-home ownership. This included giving councils the ability to push council tax on second homes to 300% the usual rate. They also closed a loophole whereby second-home owners could register as a business in order to pay the much lower business rates.
Gwynedd council used these powers to hike council tax to 150% in April 2023. By the end of 2024, house prices had fallen by 12.4% as second-home owners tried to sell up. In Pembrokeshire, house prices fell by 8.9% after the council increased the council tax to 200% on second homes (though this was reduced to 150% recently).
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I’ve been saying that for a while that secondary residences should lose all tax benefits and should also have additional tax penalties applied to them as long as there is a housing crisis.
Like a second house should cost you double, and if you get a third, then the second and third should cost you triple, and so on and so forth, so that having multiple homes would be a sign of wealth and not an investment practice.
You roll that out with a gradual phase in and you would solve the housing crisis in like 7 to 10 years.
The penalties should be higher for short term rental properties-if it’s listed on Airbnb or VRBO or similar, taxes double.
This should be tied to the multiple properties IMO. With home prices today you may have to AirBNB out the house and live in a shed in the yard for a few years just to afford the mortgage.
Agree, and I missed the fact that I didn’t make that clear. If Airbnb stayed what their initial marketing portrayed them to be (connecting people who had a spare room or mother-in-law suite that was unoccupied with people who wanted a more genuine local experience,) I’d have no problem with them.
Yeah government needs to start ratcheting down on landlords. Tax rental properties as commercial businesses, as well as taxing rental income at a higher rate. If a landlord can’t afford that anymore, then they sell the property and get a real job.
A general wealth tax is much more effective.
land value taxes are even better, although wealth taxes are good too
I agree there needs to be some kind of exponentially growing tax rate for multiple houses. It might kick in after two houses since a single shared vacation home between a family should be fairly affordable.
That being said its basically impossible to get a vacation home now. No one should have 3+ homes without paying much much more.
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Overwhelmed with second homes / vacation homes are not sustainable. I guess my idea of a second home / cabin is much more upper Midwestern USA than what happens in the UK.
Good. Vacation homes should be taxed, and foreigners should get an even bigger tax. Local citizens and businesses should get preferable treatment, so that communities can be more closely knit together. The wealthy are corrosive to society, breaking down many humans for the sake of a few.
Blackrock didn’t like that.
This seems to target home owners that either rent or just park wealth in a second home as asset and then also try to evade the taxes by register their second home as a business to pay a lower tax rate.
This doesn’t target landlord / asset management companies at all. Not sure if they are a thing in Wales.
Far better than burning them…
I need to know if my uncle still has his cottage…
Tax aint the problem with property. Its that its valued too high because property is an asset of profit. Hope this helps with that issue, but it seems it just limits the trend instead of reversing it.
It is valued too high because houses are seen as an investment.
Taxing them higher makes them not profitable, so they get sold.
Meaning there is more supply, which lowers prices.
It doesn’t solve the problem of rising rent. People already owning their property are not affected by this and can profit off rent increase.
Most people renting out have more than one house, so this would affect them still, while not hurting the old couple that rents out parts of their house that got too big for them
This actually doesn’t affect landlords because council tax is charged to people living in the house first, and only to the owner if no one is living there.
This primarily affects second home owners and short term lets, but there’s other renting reform coming as well, and this has already dropped house prices, so it’s a start.
Note that the UK does not have a property tax, and is unusual in doing so; I recall reading that it is the only G7 member to not do so.
They do have a (mostly flat) council tax, and a transfer tax.
We have a few states in the US that don’t, but normally there is an annual percentage tax on the value of a house. That varies by state, but is typically on the order of 1%.
Council tax in the UK is banded based on the size of the property so isn’t that the equivalent of the US property tax?
The bands are why I’m saying “mostly” flat. There is a small amount of scaling, but it quickly hits a cap. If you have a mansion, you aren’t paying 1% of its value in tax annually.
kagis
https://www.gov.uk/guidance/understand-how-council-tax-bands-are-assessed
In England, the top band’s ceiling is 320,000 pounds.
In Wales, 424,000 pounds.
https://www.rightmove.co.uk/house-prices/wales-68336.html
House prices in Wales have an overall average of £441,640 over the last year.
EDIT: The price used is, for Wales, from 2003, so it’s typically about half of the current market value, in fairness, but it still illustrates that the thing cuts off at a certain, fairly low level.
Ah got you sorry. I see your point. Thanks
Interesting. So it sounds like this is an area with a lot of personal vacation homes? They’re pretty uncommon in general, so I doubt it would change much where I live.
But I want a small cabin by a lake at some point when I’m older. Has that dream been taken away from me, too?
As long as people can’t afford their first home, your cabin is not a priority. Plus, what’s the cost of that cabin? If it’s cheap, the tax increase won’t mean a huge increase in total numbers.
Not if you live there and this is only in Wales for now anyway.
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