Who wants to know? Angry citizens priced out of the housing market.
The Welsh Government is giving local governments more the power to control the use of homes1. Going forward, there will be three classes: a primary home, a second home (think vacation get-aways), and short-term holiday accommodation.
Local governments can set different tax rates for each housing class. The Welsh government also plans to monitor the number of homes used as short term holiday accommodation and to increase the transfer tax charged when houses are purchased to be used as a second home or as short-term holiday accommodation.
The Cymdeithas yr Iaith’s Sustainable Communities Group commented that the new property classes could make rental housing more stable for sitting tenants. But rather than put all the burden on local councils, the head of Cymdeithas yr Iaith’s Sustainable Communities wants the Welsh government to step up as well.
Meanwhile, there is news of an evaluation of the speculation and vacancy tax, which the province of British Columbia (Canada) introduced in 2017. The government raised the tax rate for vacant homes to encourage owners of vacant properties to rent them out rather than holding them vacant. The vacancy rate in Vancouver was close to 0% when the speculation and vacancy tax was introduced.
The government chose researchers at the University of British Columbia to do the evaluation. The researchers calculate that approximately 20,000 units were added to the long term rental housing market in British Columbia between 2018 and 2020. In the Vancouver area, vacancy rates for rental housing went up. As well, housing prices rose more slowly in the Vancouver area than in cities of similar size in other parts of Canada where there was no vacancy tax.
Could the speculation and vacancy tax be an example of the kind of leadership that Cymdeithas yr Iaith’s Sustainable Communities is looking for from the Welsh government?
The idea may not be as far-fetched as it might seem at first. The Welsh government has taken Canadian research about youth homelessness to heart, requiring local authorities to assist young people who become homeless (the duty to accommodate)2. In addition, the Welsh government is in the middle of a pilot program that provides basic income to young people who have been wards of the state. The goal is to assist young people aging out of care to avoid homelessness3.
You can read more about the three housing classes in Wales at WalesOnline: Councils Will Be Able To Cap The Number Of Second Homes In Wales
And for more on the Vacant Homes Tax in British Columbia, see this article in The Tyee: The Data Shows Taxing Empty Homes Works
Footnotes
- Local residents are having more and more trouble finding homes they can afford. Tempers are flaring. Try: Wales: Torching Unaffordable Homes: Impotent Mutterings Or Real Threat?
- For more, see the European Journal of Homelessness, which describes that process and the results: Social Innovation in Preventing Homelessness amongst Young People in Canada and Wales: International Engagement as a Key Driver
- Read more at the BBC: Basic income: Wales pilot offers £1,600 a month to care leavers
