Formal policy decisions and housing-market divergence under second-home taxation in Wales

Purpose This study aims to examine local housing-market paths after formal decisions to impose recurring council-tax premiums on second homes in Wales. Design/methodology/approach The study links 485,767 sales in 22 local authorities, 2015–2025, to verified decisions and administrative exposure. Group-time differences use not-yet-determined and never-determined controls. Inference uses 9,999 wild cluster multiplier replications and simultaneous bands. Census 2011, UK House Price Index (UK HPI) and office for national statistics boundaries support sensitivity checks. Findings Relative prices are near zero through month 23, then 4.1% lower in months 24–47, 6.8% lower in months 48–71 and 9.7% lower in months 72–84. The last estimate uses four cohorts and ten treated authorities. UK HPI and border exclusions preserve a negative late difference, although the strictest rule is not simultaneously significant. Transactions do not respond jointly. With 2.8% of dwellings charged in positive-return cells, direct tax capitalisation alone cannot explain the market-wide magnitude. Research limitations/implications Voluntary adoption, one never-determined authority and policy-responsive classification preclude definitive causal or affordability claims. Practical implications Evaluation should report the share of dwellings actually charged alongside the headline premium rate and track classification changes. Social implications Lower relative prices do not establish improved access for locally paid households or continuity of Welsh-speaking communities. Originality/value The study reconstructs formal decision dates and separates information, implementation and administrative exposure.