Senior Powys councillors say they are making a “strong move” by cutting council tax bills for self-catering holiday units in the county that have been transferred from business rates to council tax.

But it seems that the council is moving to write off this debt ahead of a move by the Welsh Government to bring in legislation to waive the first year of backdated premium bills.

At a meeting of council’s cabinet on Tuesday, March 24, senior Liberal Democrat and Labour councillors received a report updating them on the situation which affects more than 250 self-catering holiday units in Powys.

This is a consequence of failing to meet the new Welsh Government criteria over the number of days they are available or are let during the year.

The council charges a 100 per cent premium on long-term empty properties which doubles the bill, and 75 per cent on periodically occupied dwellings which are second/holiday homes.

The report explained that as the properties fall into the “periodically occupied” criteria, a 75 per cent premium applies to them as well as the standard council tax charge.

In some cases, a complex of several holiday cottages could be rated as a single business for the business rates but as separate properties for council tax.

Finance portfolio holder Cllr David Thomas (Labour – Cwm Tawe) explained that the council is allowed to backdate these bills to April 1, 2023,

This means backdated bills between £30,000 to £55,000 have been issued to some owners.

Cllr Thomas said: “Council tax arrears from premium accounts is significant and make up 24.8 per cent of the total arrears.

“A substantial workload increase has been undertaken for council tax recovery and appeals teams.”

The report explains council tax collection rates for properties where a premium is being charged is £2.433 million in arrears as of April 1, 2025.

Cllr Thomas continued: “The Welsh Government is consulting on introducing a statutory exemption so that transferred self-catering holiday units pay council tax bills for the first year only without no premium applied, that’s effective from April 2027.

“Local authorities are encouraged to consider discretionary help now,”

He added that scrapping the first year of the premium bills will cost the council £1 million and a contingency fund of £1.2 million had been set aside to allow them to do this.

Council leader, Cllr Jake Berriman (Liberal Democrat – Llandrindod North) said: “I’m really pleased to see this. This is a really strong move on our part as a council to address the concerns that have been put to us as councillors and I endorse the recommended approach.”

Cabinet voted unanimously to approve the move.

The report did explain that those people who have already paid their bill in full will be refunded.