Welsh Government to review holiday let tax rules
The Welsh Government is to review the rules that determine whether self-catering holiday lets pay business rates or council tax, including the controversial requirement for properties to be let for at least 182 days a year.
A 12-week consultation launched today will examine whether the current threshold should be reduced and proposes new exemptions for some holiday lets that could not reasonably be used as permanent homes.
Since April 2023, self-catering properties have been required to be available to let for at least 252 days and actually let for at least 182 days in the previous 12 months to qualify for non-domestic rates rather than council tax.
The current rules were introduced after the number of self-catering properties paying non-domestic rates almost trebled between 2013 and 2023, rising from around 4,000 to more than 11,000.
Ministers said the consultation would consider whether the 182-day threshold remained at the right level and what effect a modest reduction could have on tourism businesses, local authorities and communities.
The government is also proposing five new exemptions for self-catering properties that could not realistically serve as permanent homes.
These include properties that are part of a wider business, large multi-unit developments, properties subject to planning restrictions, accommodation within the curtilage of the owner’s home and holiday lets located on the owner’s farm.
Cabinet Minister for Finance Elin Jones said: “Our manifesto included a commitment to keep the 182-day letting threshold under review and create clear and reasonable new exemptions where self-catering accommodation would not qualify as a private home.
“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.”
The consultation opens on 31 July and runs until 23 October.
The review of the 182-day threshold is expected to be concluded by the end of 2026. Any changes would require legislation and, subject to the outcome of the consultation, could come into force from 1 April 2027.
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In St David’s for instance it’s the holiday makers that stay in the holiday let cottages that support the community. The vast majority of people that live there permanently don’t use local restaurants or pubs and get online food deliveries from Haverfordwest. They should remove the 182 rule altogether as it’s not doing anyone any good.
Before the 182 day rule was brought in second home owners were abusing the system to avoid paying Council Tax. If an owner can’t rent a property in a desirable holiday location for half the year then it’s not a viable business and the property shouldn’t be classed as a business premises.
Reducing the 182 day rule will result in less of the benefits you are describing. The whole point is to have those holiday makers supporting local businesses all year round, not just during the six weeks of summer with the property sitting empty the rest of the time.
In my area it has seen more holiday lets revert to actual long term rental homes. In residential areas holiday lets are criminal as far as im comcerned and houses on residential streets etc should not be classed as appropriate rentals. A clearer definition of the criteria of a holiday let is needed.. the current rules are achieving some results where i live
In ynys mon, the holiday homes owners are trying to sell up, but not many sales seem to be going through. We had one house a few doors down on the market for 3 years. I’ve seen them go for auction and still not sell. We are getting for retirees, but the holiday homes aren’t always well suited for family living. Overall it is a s show, lots of locals can’t sell up either and have been stuck in small houses with growing families because the market basically crashed and no one wants to drop their prices (or more likely… Read more »
How many aren’t serious about selling and are just delaying the surcharge by a year.
It would be quite something for plaid to loosen the rules on holiday homes given this was the cornerstone of the cooperation agreement.
It would be quite something for a government to adjust legislation within a year of being elected to better meet the aims of the original legislation whilst reducing disbenefits .
However maybe it isn,t actually ‘something, when that government puts the good of Cymru and Cymry to the fore.
Makes a change from the past quarter century.