Consultation launched to give holiday lets more flexibility
New proposals have been suggested to adjust the way tax rules for self-catering holiday let owners are applied.
Since April 2023, self-catering properties must be available for 252 days and actually let for 182 days each year to pay non-domestic rates instead of council tax. The rules were brought in to ensure property owners make a fair contribution to their local community.
The Welsh Government is seeking views on two key changes to the way the rules are applied, to give the sector extra stability.
The first is allowing holiday let owners to use an average of 182 days let over several years. This means those who narrowly miss 182 days letting in the latest year would remain on non-domestic rates if they had achieved it on average over two or three previous years.
The second is allowing up to 14 days of free holidays donated to charity to count towards the 182-day target.
Grace period
The consultation also asks whether councils should consider giving businesses more time to adjust, such as a 12-month grace period before they may have to pay higher council tax rates when they move from non-domestic to domestic classification.
Cabinet Secretary for Finance and Welsh Language, Mark Drakeford said: “Tourism makes an important contribution to the Welsh economy and to Welsh life. Wales has so much to offer, and we want to ensure we realize that potential in a way that achieves a balance between our communities, businesses, landscapes and visitors.
“We work closely with tourism and hospitality businesses to help address the challenges they face, while ensuring everyone makes a fair contribution towards local economies and funding public services.
“While most holiday let owners are already meeting the new rules brought in from 2023, with 60% of properties meeting the letting criteria, we have listened to those working in the sector and are proposing small changes to the current rules to support them.”
The consultation is open until 20 November. Respond here
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The 182 night rule was bound to cause trouble as it is over half the minimum number of nights needed to qualify as a holiday let business in England. This is a logistical nightmare for the valuation office and the councils as they have to change the status of holiday lets on a yearly basis from business to residential and back again depending on the business acheiving the 182 target or not. The valuation office is already under staffed and are taking up to six months to deal with enquiries. While all this is going on some local people with… Read more »
It’s a strange argument that unpopular holiday lets which can’t meet the threshold and are empty most of the time are actually helping local communities by keeping the English out. Who’s to say that by putting it on the market at market rates it can’t be bought by someone from the area looking to upsize, perhaps a GP or solicitor, which in turn frees up a smaller property for other locals to buy.
140 -170 would be a more appropriate number when compared to the English requirements.
What does it matter what another jurisdiction does? They’ll be copying Wales soon enough, just as they are with second home surcharges.
A lot of these properties are small cottages and not what someone would class as in the ‘upscale’ category. They are in effect expensively renovated first time buyer houses. Also missing the target does not necessarily mean they are unpopular. The busy season is from April to September and a poor summer weather wise with less people coming to Wales on holiday can easily make some businesses miss the 182 target. I agree with the target by the way, but it looks like it’s been risen too high too quickly.. hence the slight backtracking.
There are two types of holiday let. Those that are just a bed in the right (probably highly seasonal) place. And there are those that are destinations in themselves, properties so unique and characterful people don’t care if it’s raining or snowing because they’re enjoying just being in the property. By “unpopular” I mean the first type that no-one would want to stay in if there wasn’t a beach or a mountain half a mile away. The second type should be popular all year. And if someone has to recoup an investment on an unpopular holiday let, they are free… Read more »
Nice to see someone on this website ( the only one apart from me) who actually talks any sense and actually knows what they are talking about. The Valuation Office has been overwhelmed with very many second home owners in West Wales falsely claiming to be running a business over recent times and accordingly, the Welsh Assembly government increased the number of qualifying days let from 70 to 182 – now what is happening is that genuine holiday let businesses are having to discount very heavily to meet this onerous number of days – this is not sustainable. Well done… Read more »
A totally confused policy with ‘unintended consequences’. I alerted Janet Finch-Saunders MS to the fact a year or so ago that Ceredigion County Council had actually made a loss since the second home premium was introduced in the county i.e raised cumulatively less money than had it not been introduced – Ceredigion CC was actually counting a reduction / loss in one year as a ‘one off’ when it was obviously recurring. Under a FOI request in respect of each council, Janet Finch-Saunders MS found the same as well as with other counties – that is, those that actually bothered… Read more »
And here you are adding to the confusion because the article isn’t about the second home surcharge but the self-catering threshold for non-domestic rates.
But since you raise it can you explain the reasons for this revenue loss you claim? If it’s because increasing a small surcharge to a larger surcharge has meant some properties are no longer being used as second homes and instead are occupied as a main residence paying the standard rate of ctax, then that’s good news because it means the policy has successfully increased the number of properties available for local families.
The reason the number of days was increased to 182 was because so many individuals with second homes were claiming to run a business when in fact they were not. Names of individuals ‘ residing on holiday’ were in fact made up names and members of their families. You can check with the office of the Rt Honourable June Saville Roberts MP ( it was confirmed by her clerk) and also in writing by Mr Cefin Campbell AM. The whole evidence I collated was sent to Mr Derwyn Jones ( Auditor General) and Douglas Bain. Not only were these individuals… Read more »
Is there any reason why you didn’t address the point?
What you’re describing is fraud and/or tax evasion and evidence should be sent to HMRC. It’s irrelevant to policymaking.
As far as I understand it the occupancy rate was increased to half a year so it’s bringing visitors into an area most of the time, in order to justify not using it as a main residence during a housing crisis.
All of these policies should be aiming to reduce the time habitable accommodation is sitting empty when there are people desperate for housing.
I did address the point. What you fail to understand is that the 2 are linked – the ONLY reason the threshold was raised to 182 days was because second home owners were claiming they were running a business, so it is relevant to the current policy. Not only were they not paying the premium on council tax but they were also claiming full business rate relief – hence the reason revenues raised were reducing. (Ms Janet Finch-Saunders IS correct). Following extensive research, I HAVE corroboration locally, written confirmation from Cefin Campbell and verbally from Liz Savill-Roberts’s own office. The… Read more »
There’s two different points here. First, there’s the reason why the threshold was increased from 70 nights to 182 nights. And that’s surely because it was possible for second homers to legitimately rent their property over the summer months to genuinely meet this low threshold while they were at their other home in the south of France. They could then enjoy a second home in Wales for the rest of the year without making any contribution to the local community. Clearly that doesn’t justify taking a property out of use as a main residence because this reduces the housing stock… Read more »
First point – NO. If you will kindly read my response, it was SOLELY because second home owners were ‘ playing the system’. The Valuation Agency was completely understaffed and overwhelmed by the numbers claiming to be running legitimate businesses when they were nothing of the kind ! You are making suppositions when I have the HARD EVIDENCE – I offered to send you the evidence. It is NOT merely an allegation, there is both written and verbal corroboration. The ‘ 70 day’ tax rule has existed for decades ( maybe 30 years or more?) – the exemption for small… Read more »
If the problem was only down to people playing the system then the simple answer is random audits and fines or jail for fraud or tax evasion. Enforcement in other words. But in the context of a housing crisis, a 182 day rule makes sense to ensure the limited housing stock was being used more efficiently. Half a year ensures a habitable property isn’t sitting empty “most” of the time. It’s not clear how you can say with any certainty that this wasn’t the main motivation behind the policy change, even if also incidentally made it harder to play the… Read more »
I have now googled when the number of days let was introduced – 41 years ago then. It wasn’t changed until ‘ second home’ / holiday lets became such an issue. You see ‘ I do know my onions‘ !
The regime was introduced in 1984, to clarify confusion as to whether letting holiday accommodation short-term constituted a trade. In their 2009 Budget the Labour Government announced it would abolish the tax regime (PDF).
Back then there wasn’t a housing crisis.
Oh yes I forgot to mention that Ceredigion cc replied to me that copious second home owners converted to ‘holiday let’ during Covid 19 when there was a travel ban !!! Work that one out ! QED.
It’s not possible to make a ‘loss’ on a premium. The base charge is still payable. The ‘loss’ is where a second home goes up for sale into the local market and while it is vacant, for sale, has a six month window of no council tax. If it’s sold the policy has worked. If it is again purchased as a second home, the premium then becomes payable, making up any losses in the previous six months. Hissy Fit Saunders got it wrong.
The reason the number of days was increased to 182 was because so many individuals with second homes were claiming to run a business when in fact they were not. Names of individuals ‘ residing on holiday’ were in fact made up names and members of their families. You can check with the office of the Rt Honourable June Saville Roberts MP (it was confirmed by her clerk) and also in writing by Mr Cefin Campbell AM. The whole evidence I collated was sent to Mr Derwyn Jones (Auditor General) and Douglas Bain. Not only were these individuals not paying… Read more »
Just do your research Brychan as I did ! Ask your local authority for the year on year numbers as I did but don’t be surprised if you do not get a response. Ask yourself why only 3 county councils responded to the FOI request. Please be advised I am most certainly not a lay person in this context.
If you holiday let owners to use an average of 182 days let over several years it will result in complete non-compliance. They’ll just rack up a few years under the threshold, pull the venue for a year out, pay one year normal council tax, then start a fresh period of non-compliance. As for the charity suggestion, this is bizarre. Wales has no control over the charity commission and charities can be set up with a constitution specifically to take advantage of such a trade. The Wolverhampton pensioners society. Free weekend in Wales to all members, membership £200. Eton and… Read more »
The original plan to refurbish Number 10 in the opulent style of a great dictator complete with solid gold toilet for Boris Johnson began life as a charity. The concept has almost nothing to do with charitable activities.
Pathetic.