Call to cut holiday let threshold as consultation deadline approaches

Nation.Cymru staff

A rural business organisation is calling for a substantial cut in the number of days holiday accommodation must be let to qualify for business rates, ahead of a Welsh Government consultation deadline this week.

CLA Cymru, the Welsh branch of the Country Land and Business Association, wants the current 182-day requirement reduced to 105 days.

The organisation represents around 3,000 members with farming, land and rural business interests across Wales. It works with Senedd Members and Welsh MPs on agriculture, rural economic development and planning policy.

The consultation closes on Friday, October 23. It considers a more modest reduction, with 154 days given as an example, alongside exemptions for accommodation that could not reasonably be used as a permanent home.

Since April 2023, self-catering properties have generally needed to be available to let for at least 252 days and actually let for at least 182 days in the previous year to qualify for non-domestic rates.

Properties that do not meet the criteria can become liable for council tax and, depending on local rules and exemptions, a second-home premium of up to 300% on top of the standard bill.

CLA Cymru says some businesses have received unexpected tax demands running into tens of thousands of pounds, with as little as seven days’ notice to pay.

It argues that occupancy depends heavily on location, seasonality and the type and size of accommodation, and that lower occupancy does not necessarily mean a property is not being run commercially.

A survey of its members found that nearly 30% of Welsh self-catering accommodation covered by the survey was let for fewer than 140 days a year, according to the organisation.

CLA Cymru said it believes the current 182-day actual letting requirement is too high and does not adequately reflect the realities of operating a genuine self-catering business in rural Wales.”

The Welsh Government launched the consultation on July 31 following Plaid Cymru’s manifesto commitment to keep the threshold under review.

Speaking at the launch, Finance Minister Elin Jones said: “I have heard representations from a number of businesses that are making meaningful contributions to their local economies but are unable to meet the current threshold.

“This consultation will help us find a solution that works better for everyone, including businesses, local authorities and local areas.

“I am committed to getting the balance right – keeping homes in our communities while giving tourism the support it needs to thrive.”

Exemptions

Five proposed exemptions could cover accommodation forming part of a wider business, large multi-unit properties, properties subject to relevant planning restrictions, accommodation within the grounds of an owner’s home, and properties on an owner’s farm.

CLA Cymru supports the principle of exemptions but says businesses need clear evidence requirements and consistent national guidance on how they would apply.

It is urging operators to submit occupancy figures and examples of how the current rules have affected investment, employment and business plans.

Cleaners, tradespeople, hospitality firms and other businesses supported by the self-catering sector are also being encouraged to contribute.

Responses can be submitted through the Welsh Government’s consultation on the classification of self-catering properties for local tax purposes until October 23.

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