Welsh Government asked to look again at self catering holiday rule

The Welsh Government will be asked to look again at its rule that self-catering holiday lets must be occupied for 182 nights to pay business rates.

The higher threshold was introduced in a bid to close a potential loophole where it was feared second home owners could avoid council tax, including at a premium rate, by registering for business rates when homes only had to be let for at least 70 nights to qualify.

Monmouthshire County Council’s destination manager Nicola Edwards told a council committee she believed the new figure is “too high” and warned it could hit efforts to grow the county’s tourism economy, estimated as worth £329 million last year, and potentially the council’s ability to raise funds from a proposed tourist tax.

‘Too high’

As a result its place scrutiny committee has agreed to write to the Welsh Government on the “challenges of the 182 day occupancy threshold and its impact on the tourism economy in Monmouthshire”.

Councillor Angela Sandles, the Labour-led council’s cabinet member responsible, who attended the scrutiny meeting, said she agreed the 182 day rule needed to be looked at but should be done in tandem with the Welsh Government’s proposals for registration and licensing of self-catering accommodation and holiday lettings such as Airbnb’s.

Ms Edwards told councillors the 182 threshold is “in my opinion too high” and said: “That is going to be very challenging for our self-catering accommodation providers to achieve which will in turn limit growth in our economy if those businesses don’t survive.

“It will also limit our opportunity to raise income from the visitor levy which is on overnight stays, so there is a lot to think about there.”

‘Squeezing’

Committee chair, Osbaston Conservative Jane Lucas, said the rule was “squeezing” self-catering providers.

Labour member Laura Wright said she was concerned the committee was looking at businesses that are “not viable” if they can’t hit a 50 per cent occupancy rate but Ms Edwards said some are legally prevented from operating all year round or unable to due to weather conditions such as flooding and are operating in a “depressed” market.

The Welsh Government is due to introduce a bill in the Senedd on November 25 to give local authorities the power to raise a “a small charge” on overnight stays, described as a tourism levy, if they wish. Funds would be spent to support sustainable tourism which could be projects such as restoring footpaths or maintaining public toilets.

It has also said research and consultation has shown registration is needed to support a levy and the bill will include a national register, described as the first step towards a statutory licensing scheme for visitor accommodation.