Holiday home crackdown having 'impact on purchasing behaviour' in Welsh hotspots
A holiday home crackdown in Wales is having an "impact on purchasing behaviour" say tax chiefs. The growth in second homes and holiday lets in some rural and coastal communities triggered a backlash over fears about the impact on local people.
There were parts of Gwynedd where half of all homes were holiday properties with warnings about the negative consequences this was having on the Welsh language and culture. It has seen an effort to mitigate that trend in a bid to free up more homes for local people - although critics say the focus should be on building more properties.
Measures include significant council tax premiums on second homes as well as stricter criteria for a property to be classed as a holiday let, which are exempt from council tax. Cyngor Gwynedd has also introduced a new Article 4 rule that requires planning permission for a residential property to change its use. Other areas are looking to follow their lead.
While the measures have been welcomed by many, the tourism industry has warned of the impact on their sector and the Tories have said the focus should be on building new houses.
Recent data in the Land Transaction Tax statistics - the Welsh version of stamp duty - is indicating that the measures are reducing the number of sales to second home and holiday let buyers
Those properties sold to buy to let landlords, or as second homes, holiday homes or holiday lets, face a higher rate transaction cost. It is these higher rate sales that are falling as a proportion of total sales.
Compared with the previous year (the year ending June 2024), the local authorities with the largest percentage changes were:
Isle of Anglesey (decrease of 8 percentage points to 25%)
Gwynedd (decrease of 6 percentage points to 26% )
Conwy (decrease of 3 percentage points to 21%)
The corresponding changes with the previous year for the three National Parks were:
Pembrokeshire Coast: 50% to 38%, a decrease of 12 percentage points
Eryri: 36% to 29%, a decrease of 7 percentage points
Bannau Brycheiniog: 19% to 21%, an increase of 1 percentage point
Talking about the longer term trend, the latest Welsh Revenue Authority report said: "In the past few years, there have generally been falls in these percentages in northern and western areas of Wales.
"The percentages for Gwynedd were fairly stable from 2018-19 to 2021-22 (around 37% to 39%). There was a marked fall the next year followed by a period of stability, before another notable decrease to 26% in the year ending June 2025.
"The percentages for Anglesey declined from 36% in 2019-20 to 29% in 2022-23. While there was a notable increase to 34% in the year to June 2024, there followed a larger fall to 25% in the year to June 2025."
Adam Al-Nuaimi, Head of Data Analysis in the WRA, said: "Comparing the year to June with the previous year, many areas of Wales saw decreases in their percentage of residential transactions which were higher rates, in particular the Isle of Anglesey and Gwynedd.
"We're pleased to publish our second annual article about intent behind higher rates transactions and report on trends for the first time. The article tells us that many of the trends in higher rates transactions were due to changes in purchases of second homes, holiday homes or holiday lets. These trends are consistent with policies around second homes in Wales having some impact on purchasing behaviour.
"Nationally in April to June, quarterly residential revenues were higher than the same time last year, but not as high as three years earlier. There are several reasons for the latest rise. There were increases in residential transactions and average property values over that time, and tax rates for higher rates transactions increased from December 2024."
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