Wales humiliated as tourist home tax backfires and holidaymakers leave towns empty

Following the introduction of a huge council tax rise targeted at holiday homes in coastal attractions in Wales in April in an effort to bring in over £10 million a year, a mass exodus has occurred as homeowners have been forced to sell up.

According to The Telegraph, coastal areas such as Tenby and Little Haven have been hard hit, with the number of second homeowners leaving Pembrokeshire tripling in the last year. In July, 135 second homes were on the market, compared to just 38 the previous year - a rise of 255 percent. 

Speaking to The Telegraph, a multiple restaurant owner in Tenby, Matthew Ronowitz, said that such homeowners have helped the town become “a lot stronger and more prosperous” in recent decades, however, the area is now suffering due to them leaving. 

“We massively depend on second homeowners and if they are taken out of the equation, we struggle,” Mr Ronowitz said. “They don’t want to be in the area because they feel like they’re being pushed out, which is just plain silly from the council.”

He added that the council “doesn’t realise how much money these second homeowners bring to the county. They are treating them as a cash cow but not realising it’s forcing them to leave the area and hurt Tenby.”

Conservative opposition councillor Aled Thomas added that the council is making “villains” out of second home owners and is “absolutely haemorrhaging” support for Tenby’s tourism industry, with owners of holiday catering businesses being driven out of business. 

The Welsh Government had previously granted local councils powers to significantly increase levels, allowing them to charge an additional levy of up to 300 percent on top of the normal council tax rate. 

Council tax increases in Wales, according to data accumulated by The Telegraph from the Department for Levelling up, Housing and Communities (DLUHC), Stats Wales and the Scottish Government, dwarf other nations, with a change in average B and D council tax between 1999/ 2000 and 2024/2025 being nearly 250 percent, compared to just under 150 percent in England and just over 50 percent in Scotland. 

As a result, second home owners in the county of Pembrokeshire complained about “grossly inflated” and “unaffordable” bills, according to a campaign group earlier this year.

“On one of the roads I drive down there’s about 20 houses for sale,” said Cllr Thomas. “But nobody local is going to be able to buy these houses. You’re talking £400,000 houses, they aren’t affordable. The only people who are going to buy them will be even richer than the previous owners.”

Rhys Jordan, an estate agent in Pembrokeshire, described the council’s strategy as an “absolute disaster”, and one of “the most ill-thought-through policies ever”. 

“We’ve got hundreds of houses sat on the market dragging everyone else’s house value down.”

Labour councillor Joshua Beynon, however, defended the scheme, arguing that the large number of homes would help address the local housing problems: “The council has a role in supporting the local economy but importantly providing homes for locals who live here.

“These early indications are positive signs that more houses are reaching the market for locals.”

The premium tax charge on second homeowners is said to be undergoing a review at a council meeting next month.