Second home owners are reportedly exploiting a legal loophole to avoid paying thousands in a council tax premium. The local authority in Pembrokeshire applies an extra 150% to its standard rate for owners of second homes in the county.

To qualify for a 12-month reprieve, a second home has to either be on the market for sale or offered for rent, both at "reasonable" prices. But owners aren't obliged to sell or agree to let during that time. They can only be granted an exemption once.

Pembrokeshire raked in an extra £10.6million in the financial year 2024-25, according to figures published by the council. Eighty-five percent of extra income from premiums was used for "affordable" housing and "sustainable" communities.

The council could have taken more if 19% of second homes had not been exempt. Council figures show 3,503 such properties in the county were subject to the premium in June. This represents 81% of the 4,328 second homes in Pembrokeshire.

Buying agent, Carol Peett, from West Wales Property Finders, said there was "no question" people have been putting property on the market with no intention of selling.

She told the Telegraph: "People are finding ways to get out of paying the tax. They are being forced into ways of avoiding it, as it's crippling for the lower-end properties."

Aled Thomas, a Conservative councillor, told the same publication he doubted whether owners of second home owners were using the tactic to game the system. He suggested people were putting their second homes on the market, but they just weren't selling.

Analysis carried out by the Express shows a typical Band D second home owner has to pay £4,130 in council tax compared with the standard levy of £1,652. Second home owners in the highest band face an annual council tax bill of £9,637.

Taking advantage of the loophole is legally sound. Most councils in Wales have a 100% premium, but the rate levied by local authorities in Pembrokeshire, Gwynedd and Denbighshire is 150%. Councils in England can impose a 100% rate.

A council spokesman said there are seven different exceptions to the second homes council tax premium making up the 19% figure, of which putting the property up for sale is one.

He added: "To receive this time-limited exception, the homeowners must provide evidence that the property is being marketed for sale. For example, they must provide a copy of the sale particulars and listing on a website at a reasonable price."