Efforts to drive second home owners out of one of Wales’s most popular counties have faltered, despite the imposition of steep council tax penalties.
Ceredigion council introduced a 150% council tax premium in the hope that the soaring bills would push owners to sell up and return properties to the local housing market. But figures show the number of registered second homes has fallen by just 16 in two years – from 1,648 in 2023 to 1,632 this summer.
The policy was designed to change behaviour by making second homes unaffordable, but the reality has been different. Owners appear to be absorbing the costs, leaving the council reliant on the extra revenue to shore up its finances.
The 150% premium is now helping to offset a looming £900,000 budget shortfall after the authority’s overall council tax collection rate slipped from 98.8% to 96.3%. Ordinary households, already hit by back-to-back rises of more than 9%, have struggled to pay, but second home owners are plugging the gap.
In Borth, a coastal holiday hotspot, owners of a Band D property now face bills of £5,732 a year. Yet the charges have failed to trigger a significant sell-off.
A council report admitted that the “behavioural change” expected from the policy has not materialised. Instead, the premium has provided a “temporary financial benefit” while the number of homes available to permanent residents has barely shifted.
Welsh councils can charge up to 300% extra on second homes, but few go beyond the 100% level common across England. Ceredigion is among the handful to push further. Unlike some authorities that ringfence the cash for affordable housing, 75% of its revenue is directed to the general budget, with the rest earmarked for a community housing scheme.
The backlash is growing. Campaigners warn families are “at breaking point” after years of council tax hikes, while critics say premiums are exposing the unfairness of policies that burden both local residents and second home owners without solving the housing crisis.
In neighbouring Pembrokeshire, owners have found ways around the levy. One in five have secured one-year exemptions by listing their properties for sale or rent, even without real intention to close a deal.
The Ceredigion council premium remains in place, but with little sign of second home owners selling up, questions are being asked about whether the crackdown can ever deliver the intended results.
