The Welsh Assembly Government has taken action to close a loophole which was allowing some people to pay lower charges on their propery by paying business rates instead of council tax. New legislation will ensure that owners whose properties are predominately unoccupied or used as a second home can no longer pay the lower tax.

The Welsh Social Justice and Local Government Minister, Carl Sargeant, said that in future for a building to be liable for business rates rather than council tax, it would have to be let for a minimum of 70 days during the previous 12 months. Charges on this type of property are often significantly lower than council tax and the Assembly Government believes some owners reduce the amount of tax they pay by declaring a property is available for let but making little effort to find tenants.

It is concerned that premises that are empty for much of the year have a negative impact on their local communities as they do not have occupants who buy local goods and services and who contribute to the community. Mr. Sargeant said: “This legislation is crucial as it closes a potential tax avoidance loophole, while not adversely affecting the taxation liability of genuine businesses.”

He recognised the importance of a thriving tourism sector to the Welsh economy and said more than 95 per cent of self-catering properties that were liable to pay business rates already benefited from rates relief funded by the Assembly Government. Most of them paid rates of less than 10 pounds a week.