Mum-of-three Katie Bullion, who runs marketing agency franchise Activ Marketing, grew up in the Pembrokeshire seaside town of Tenby, and decided to buy a second home there so her family could spend more time in the area.
But in 2023, the local council in Tenby imposed a 150 per cent premium on properties classed as second homes – a cost Katie had not factored in when she bought the house in 2022.
Katie would have paid even more, at £6,400, as her home falls under Band E.
square FIRST-TIME BUYERS I've saved £15k for a house deposit aged 19 - no thanks to my school education
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She is one of thousands of homeowners who have recently flocked to apply for their home to be assessed for business rates to avoid double council tax bills.
Many councils introduced them as a way of discouraging second home ownership amid concerns that holiday properties are negatively impacting local economies.
Many of those holiday lets will also be eligible for small business rates relief of up to 100 per cent, meaning they won’t pay anything.
She told The i Paper that while she is “sympathetic” to locals, she feels holiday let owners are being unfairly demonised in the same way as people who have empty second homes.
“I see the argument from both sides – I understand people don’t want empty second homes creating ghost towns, but that isn’t the case for holiday lets.
“We employ local cleaners and a local agent, and all of those things contribute to the economy. It’s not the same as an empty second home.”
Last July the number of second homes for sale in Pembrokeshire had trebled from the same time in 2023, rising from 38 to 135.
What makes a holiday let eligible for business rates?
Estate agents and the HomeOwners Alliance have reported seeing second homeowners registering their properties for business rates to avoid council tax and access small business rates relief instead.
The threshold is even higher in Wales, where Katie lets out her home. The property must be available to let for at least 252 days per year and actually let out for 182 days.
Paying business rates instead of council tax means holiday lets are effectively treated like small businesses.
Katie and her husband have now got an accountant to help them manage their holiday let.
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