Proposal to Cut Pembrokeshire Council Tax Premium for Second Homes Using Potential Tourism Tax Funds

A call to cut the council tax premium paid by second home-owners in Pembrokeshire by using funds from any future tourism tax has been proposed by one such homeowner.
Anyone who has a second home in Pembrokeshire currently pays a premium on the council tax, at 125 per cent above the basic rate, but that rate has been higher in previous years.
The second home-owner, who wished to remain anonymous, has written to the leaders of all the political groups on Pembrokeshire County Council with his suggestion, and to senior councillors including Cabinet Member for Finance, and former leader, Cllr Jon Harvey.
The north-county second home-owner said he was in favour of the premium, but says the current level is “not equitable,” calling for “a short-term maximum of 100 per cent, with a long-term target of 50 per cent”.
He instead proposed using the tourist tax.
Back in 2025, it was announced Pembrokeshire would not adopt the tourism levy during its current administration, which runs up to 2027.
The visitor levy, a decisions for each of Wales’ 22 local authorities on whether to adopt it, would see holidaymakers pay 75p per person per night for staying in hostels and campsite pitches, and £1.30 per night for those staying in all other accommodation types, such as hotels, B&Bs and self-catering accommodation.
Visitor levies are used successfully in many parts of the world, including Manchester, Greece, Germany, Netherlands, Spain, Portugal and California.
Objections to the visitor levy have said it “could impose additional costs on tourists, potentially deterring budget-conscious visitors or driving them to alternative destinations without such charges”.
The second homeowner says, on his calculations, the 75p rate “would allow an immediate significant reduction in Second House Premium to 100 per cent”.
He added: “There are usually two arguments put forwards against a Tourist Tax … neither of which stand up to the most trivial scrutiny.
“The first argument put against the introduction of a Tourist Tax is that it causes significant additional administrative burden for hotels, accommodation etc. This argument is risible; for most small local business entities such a change probably requires no more than an additional column in an Excel spreadsheet.
“The second argument is that the imposition of a Tourist Tax would dampen demand for holidays in Pembrokeshire. This argument typically relies upon most casual empiricism based on random conversations with holidays makers etc.
“The reality is that there is a credible literature on the formal relation between price and demand which is summarised in ‘Evidence review of elasticities relevant to a visitor levy in Wales’ (2022). In general, the findings suggest that accommodation tends to be less sensitive to price increases than other tourist expenditure.
“The latest estimate, in 2024, was Pembrokeshire recorded between nine and 10 million visitor/nights. Thus, a notional Tourist Tax of (say) £1 per person per night would produce a total of more than £9 million for the year.”
Responding, Cllr Harvey said the level of second homes premiums and any introduction of a tourism levy “are matters for full council”.
“Last year full council resolved to reduce the second homes premium from 150 to 125 per cent for the financial year 2026-27. As this is decided on an annual basis it will again come before full council later this year.
“With regard to a Visitor Levy, I don’t envisage an introduction during this administration. Post the 2027 [local government] elections it will be a matter for any new administration to consider.” ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

By BBC LDRS ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​