AQW 22950/17-22

Ms Claire Sugden
Independent
East Londonderry

Tabled Date: 22/09/2021
Answered On Date: 01/10/2021
Priority Written: No

Question:
To ask the Minister of Finance to detail any considerations he has given to enabling local councils to charge second home owners differing rates levels, similarly to the Welsh local authority areas of Gwynedd and Swansea.

Answer:

While Council Tax in Britain is often regarded as being the broad equivalent of Domestic Rates here, Council Tax and Rates are two quite different systems.

Council Tax is a form of personal taxation based on property values which evolved out of the old Community Charge, which was better known as the ‘Poll Tax’. Because of the personal taxation element to Council Tax, Councils in different parts of Britain apply discounts or multipliers for Council tax payers depending on personal factors. Ownership of a second property is one of those factors. The power to charge a levy on second homes is a discretionary power for each individual council in Wales, whereas in both England and Scotland Councils have discretion to apply a discount for second homes.

By comparison, Domestic Rates here is a pure property tax, with no element of personal taxation, which is payable in most circumstances by the occupier of the property. Second homes are charged the same rates as sole or main residences.

In 2007, as part of the Executive’s Review of domestic rating, the Executive considered applying an additional levy on second or holiday homes. However, the option was ultimately ruled out on the basis that it would be easy to evade, impossible to vet at reasonable cost and would be unlikely to make any difference to the decisions taken by the investors seeking second homes. As a result the Executive decided not to recommend any change in this area of rating policy. I have had no request from Councils to revisit this issue.