A Welsh tourism boss has said new rules to be imposed by the Welsh government are “reminiscent of a Stalinist regime”. New regulations are to be brought in over how long holiday lets need to be let out to qualify for business rates rather than pay council tax.
Under the new rules, local authorities will be able to increase the council tax premium to 300 per cent on properties that don’t reach the minimum occupancy requirements. The Welsh government says that the move is intended to tackle rising house prices in some rural and coastal communities.
Most holiday lets in Wales currently have a low enough rateable value that they pay no business rates at all. Fears abound that costs could be passed on to holidaymakers heading to North Wales.
Ashford Price, owner of the National Showcaves Centre for Wales and Secretary of the Welsh Association of Visitor Attractions, fears around 1,400 business will not survive due to the changes, reports North Wales Live.
Said Mr Price: “From April 2023 the Welsh Governments ‘utopian’ future for those still left in self-catering in Wales will be like working under rules reminiscent of a ‘Stalinist Regime’ where you are told the number of days your business ‘must’ be open for (252 days.), the number of letting days your business ‘must’ reach (182 days) – which is an unobtainable figure for the majority of operators in Wales, and finally the ‘punishment’ if your business fails to meet any of these new government demands is an increase of up to 300% in your rates bill.
“A leading tourism expert anticipates that around 1,400 business will be forced to close owing to these new rules, and many thousands of Welsh people will be made redundant. Rural areas will also be the poorer as when genuine self-catering operators cease to operate there will be fewer tourists spending money in their area during the tourist season. This ‘summer tourist money’ helps the local shops, garages, and pubs survive the long quiet winters in many rural locations.
“A high number of these lovely self-catering properties will be put up for sale. However, these properties will not be available for most locals to buy as the asking price will be beyond their reach.
“Hence, those in government who are claiming that these new draconian measures being imposed on genuine Welsh self-catering operators will lead to an increase in housing stock for local people are misleading the people of Wales. In many cases what will happen is that these properties will be bought by wealthy English ‘incomers’ who will not mind paying 300% extra on rates for an exquisite piece of Welsh real estate that their families can then use as a ‘holiday home’.
“This is just one example of the unintended consequences that the Welsh Government do not seem to comprehend within their anti-tourism agenda.”
Mr Price also warns that the tourism business in Wales is intensely seasonal, leading to holiday lets in the principality being less easy to fill for long periods of time. He continued: “Winter opening for many in Wales, especially in rural areas, is simply not a viable option as the demand is not there in the first place and anyway everything locally closes down.
“Currently we also have a cost of living crisis in Britain which we are told will get worse this winter. This means that many people will not be able to afford a summer holiday in 2023 let alone a winter one.
“To say that the future looks bleak for many genuine Welsh self-catering operators is an understatement, as there will be no future for many of the 4,700 people currently employed within the Welsh self-catering sector from April 2023.”
Welsh Government finance minister Rebecca Evans said: “I recognise the strength of feeling among self-catering operators and have listened to the representations from individual businesses and industry representative bodies. There is limited evidence available in relation to some of these considerations and I am grateful to the sector for providing additional information they have gathered from their members.
“This has been taken into account in completing the Explanatory Memorandum and Regulatory Impact Assessment, which makes use of the available evidence. I recognise that the stronger criteria may be challenging for some operators to meet. The purpose of the change is to help ensure property owners are making a fair contribution to local communities, for example by increasing their contribution to the local economy through greater letting activity or by paying council tax on their properties.”