A woman believes she may have to demolish her tiny garden cabin after it was classed as a second home.

Hazel Cullen, 60, moved to Wales with her husband Richard and teenage daughter Megan in 2019 so they could start their ‘retirement dream’ and create a getaway for guests.

The family transformed a decrepit log cabin on their farm in Builth Wells, Powys, into a cosy spot named Woodpecker Lodge.

Visitors often book the cabin on weekends and Hazel cooks for them in her 11-room country house because the cabin, no bigger than a garage, does not have a kitchen.

But one of her neighbours complained about a light in the cabin, prompting a valuation officer from Powys County Council to show up in March 2020.

Hazel, originally from Yorkshire, said she was initially told ‘everything would be okay’, but then she received a council tax bill naming the cabin a second home, skyrocketing the family’s payments.

Since 2017, local authorities in Wales have been able to charge a premium of up to 100% of the standard rate of council tax on second homes.

The policy is designed to make it more difficult for tourists to take over Wales’ best spots, increasing house prices and reducing housing availability for locals.

Powys council currently charges a 75% premium, but this has taken Hazel’s council tax bill up to £2,163.

She is worried the price will get even worse next financial year, when the premium could possibly be increased by up to 300%, taking her bill up to £9,000.

The former hairdresser said: ‘We told the council the cabin is a bedroom extension and it’s linked to our water and electricity but they’ve decided to class it as a second home and have even give it its own address.

‘It’s busy but it’s only open for half of the year and it doesn’t merit keeping it open while paying that amount of tax. They’ve said they won’t remove the council tax on it unless it becomes derelict so basically, I now have to demolish it.

‘We love Wales, we love providing tourism in Wales, but this has all made us think: “Do we want to live over the border instead?” My husband has always lived in Wales, and he has said it’s got so bad with all of the charges that he would now consider moving to England to do it instead.

‘Here I could turn every room in this house into bed and breakfast accommodation and they wouldn’t charge us a penny extra, but I can’t have the cabin outside, which was already there when we got here, without being charged this premium. This was my retirement dream but this whole thing has put the kibosh on it.

‘It would be such a shame [to have to demolish it] because we love it here and we love the area. So many small local businesses are having difficulties and we always recommend local places and places to go and see.’

Powys County Council said: ‘The Valuation Office Agency will decide if a property is classified as a commercial property or a domestic property.

‘Their classification will determine whether the owner is liable to pay either business rates or council tax.

‘For a self-catering unit to be classified as a commercial property, from April 1, 2023, the property must: in the previous 12 months, prior to the assessment, been available for letting commercially as self-catering accommodation for 252 days or more; and during the previous 12-month period been commercially let for at least 182 days.

‘Owners who want to challenge the classification of their property would need to contact the VOA. From April 1, 2023, local authorities are able to charge a council tax premium on periodically occupied properties of up to 300%. Currently Powys County Council charges a 75% premium.’

A Welsh Government spokesperson said: ‘It is for each local authority to decide whether to apply council tax premiums to the second homes and long-term empty properties in their area.

‘There are a number of exceptions to the premiums and, following consultation, we have recently extended these. Holiday lets captured by one of the exceptions should not be charged a premium.

‘We have also updated our guidance to confirm local authorities have discretionary powers to reduce or remove the requirement to pay a premium or the standard rate of council tax in the event that the new letting thresholds are not met.’

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