4. Will the Minister provide an update on how the Welsh Government ensures that second home owners pay council tax? OAQ54553

There are robust collection and enforcement arrangements in place to ensure all householders pay the council tax for which they are liable. We work closely with local government to improve these processes, wherever possible.

There is an issue of fundamental unfairness here. There are many second homes in Wales. These are domestic homes that are used as second homes while the main home is elsewhere, so I’m not talking about business units, commercial caterers or holiday businesses here. But there is a loophole in the law, and I think your Government is aware of this. There is a loophole that means that an increasing number of owners of second homes have found a means of not paying council tax or business rates. Do you agree that we need to find an urgent solution to this problem, and do you agree that reforming section 66 of the Local Government Finance Act 1988 would be one way of doing away with this unfairness?

Well, I'm not sure that I would agree that there's a loophole in the law, because the law is very clear in terms of whether a property is a dwelling for the purposes of council tax or whether it is a business for the purposes of non-domestic rates. I appreciate that some of those will be classified as small businesses and then will be eligible for rates relief. But I did meet with the Valuation Office Agency recently to discuss these specific concerns, and they showed me the forms that businesses have to fill in to demonstrate that they are genuinely meeting the conditions of a business—so, the 70 nights' occupancy and then 140 nights' availability for that property. But I know as well that we've invited local authorities to give examples of where it's not happening. So, Gwynedd, I know, gave a number of examples to the Valuation Office Agency and they investigated each of those, and they found that in none of those cases were the owners of those properties operating outside of the law.

It's legal. It's a legal loophole.

Because there's a loophole. They're able to do it. That's where the loophole is.

That's the whole point.

There's not a loophole.

As you know, the non-domestic rating Order specifies the terms you've just described—140 days' availability, 70 days' occupancy—in order to qualify as a self-catering business. And you referred to the gate-keeping role played by the Valuation Office Agency and the documentation they require, and that they'd investigated a few cases referred by Gwynedd. But what tripwire is in place within the system to ensure that the valuation office is routinely investigating and checking at least a sample of claimed self-catering properties to ensure that they are what they claim to be, whilst also recognising that the terms the Welsh Government implemented were a compromise with the industry to protect legitimate businesses?

If local authorities particularly have any concerns about any property at all, they should draw it to the attention of the Valuation Office Agency and they will assess it in detail. I think that we need to reflect as well that, actually, it's very serious if an owner of a property seeks to evade and avoid tax by claiming that their property is a holiday let as opposed to a domestic residence, because, of course, if they are found to have been doing that, then they can face a very large backdated bill for council tax. Actually, any attempt to mislead an authority or the VOA, or knowingly provide false or inaccurate information, could lead to prosecution for fraud. So, seeking to avoid or evade paying tax in that way is extremely serious.