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.