Gwynedd Council believe they’re missing out on £2m a year in potential revenue as a result of second and holiday home owners exploiting a legal loophole.

The county contains more second homes than any other in Wales, with the authority implementing a 50 per cent levy on their owners since April 2018 in a bid to dampen their popularity.

But figures reveal that, since April 2014, over 1,250 properties in Gwynedd have transferred from council tax rates to business tax rates –  meaning they can potentially avoid paying anything to the council.

While any holiday homes registered as businesses should theoretically pay business rates, they do not have to pay council tax as long as long as their holiday home is available to let for 140 days a year.

But in a bid to stop authorities losing out on valuable revenue, it has now been  confirmed that a body made up of what are considered to be Wales’ nine rural councils is officially supporting Gwynedd’s campaign to amend the Local Government Finance Act.

The WLGA’s rural forum, which also includes Anglesey, Conwy and Denbighshire, will now lobby decision makers in a bid to prevent second home owners from moving their houses from the council tax rate to the business tax rate.

During a full council meeting in Caernarfon, members were told that the latest figures represent an annual loss of up to £2m in Gwynedd and £4.5m to the general public purse across Wales.

Dafydd L Edwards, Gwynedd’s head of finance, said that the numbers of holiday home owners transferring to business rates was “showing no signs of slowing down”, with 460 having done so during the 2018/19 financial year.

“That’s a 60 per cent increase on the previous year, so there’s a real need for intervention and to ensure more justice,” he added.

Cllr Dyfrig Siencyn, the leader of the Plaid Cymru-run authority, said that the backing of the nine authorities making up the WLGA’s rural forum gave their campaign “a much stronger voice”.

He added that a civil servant from the Welsh Government had also agreed to meet the forum to discuss their concerns.

“The fact that owners of second homes can move their properties to the Business Taxation system prevents authorities from charging a premium on those houses,” he said.

“This is a policy that Plaid Cymru has been campaigning for over a number years and that campaign was successful in 2014.

“But because there is a legal loophole, many take advantage of the situation and prevent local authorities from using a key source of funding to ensure that investment can be made in housing for local people who want to buy or rent homes in their communities and protect essential local services.”

Cllr Siencyn added that their aim was to see all domestic properties remain domestic properties, regardless of their use, with a condition that planning

permission must be obtained for that property to be used as a business.

“Many areas of Gwynedd, particularly coastal communities, face huge pressures due to the high percentage of second homes,” he said.

“The result is that house prices go beyond the reach of local

families, especially young people.

“Too many second homes lie empty for much of the year, creating redundant buildings, contributing very little to communities, the local economy and social interaction.”

In September, then First Minister Carwyn Jones expressed his view that the law was robust and any changes would be down to the Valuation Office Agency, which comes under the UK’s HM Revenue and Customs.

But the UK Government’s Under-Secretary of State for Local Government, Rishi Sunak, acknowledged there was “scope for ambiguity” and confirmed that the situation was being investigated.