A TOURIST hotspot town embroiled in raging war against second home owners has been forced to row back further on harsh council tax hikes.
Bungling Pembrokeshire officials have made the “massively embarrassing” decision to slash its second home council tax premium – for the second time in a year.
This tourist town is in a war with second home owners[/caption]
Tenby officials have slashed second home council tax premiums again[/caption]
Home to holiday hotspots Tenby and Solva, local authorities admitted the tax had sparked “real financial hardship” and hit tourism hard.
Councillors have now narrowly voted to cut the penalty to 125 per cent – which is expected to save buyers £500 on an average bill.
The cut marked the second in 12 months – with the rate already slashed down from 200 per cent last year.
It comes after hundreds of second home owners flooded the markets to swerve the tax.
In recent months, property markets have been swamped with homes as a result of the punitive measures.
In Tenby, over a quarter of all properties were classified as holiday homes, with 154 of them listed for sale on Rightmove in April.
But properties have so far failed to come under the ownership of locals as the council intended – as the homes are still to pricey.
Councillor Phillip Kidney said: “This has put local people in big distress financially – that’s not what this was brought in to do.
“They’re not multi-millionaire homeowners or property developers.”
Tenby is known for its historic architecture and sandy beaches, but now, its facing a housing market in freefall.
In April, asking prices across Pembrokeshire had dropped by 8.9 per cent, according to the Principality Building Society.
Calum Phillips, senior sales negotiator with a leading estate agency in Tenby, said the home tax has had a crippling effect.
He said: “The second-home tax and the effect it’s had on the town is a conversation I have every day with buyers and sellers.
“The majority of second-home owners are looking to either sell their properties or list not to get 12-months exemption.
“Buyers know that there aren’t many second-home owners in the market any more because of the tax and that’s forcing down prices.”
When Pembrokeshire council debated the second home council tax premium last year, members were split over the level to set it at.
Council officials argued that every 50 percentage points cut in the premium was equivalent to a £2.6million cut in revenue for the cash-strapped local authority.
The council settled on a halfway reduction to 150 per cent against the wishes of the ruling group.
The 200 per cent tax raid last year was initially popular with locals who feared being priced out of their hometown.
But it caused a “disaster” – with a loophole making the situation even worse.
Second-home owners swerved the premium by putting their homes up for sale.
Many of the homes on offer are luxury sea-view pads far beyond the budget of first-time buyers.
Estate agent Carol Peett told the Sunday Times: “The sitation is a nightmare – total disaster.
“It’s killing the economy totally. There are loads of empty houses on the market that were holiday cottages.”
