Welsh Government urged to rethink 182-day rule amid concerns over impact on holiday lets
Bruce Sinclair, Local Democracy Reporter
Pressure is mounting on the Welsh Government to review controversial tax rules affecting self-catering holiday businesses, with councillors warning the current system is damaging one of Wales’ key tourism sectors.
At a meeting of Pembrokeshire County Council, members called on ministers to bring forward a promised review of the 182-day letting rule, with council leader Cllr Tessa Hodgson agreeing to write to the First Minister seeking an update.
The rules require self-catering holiday properties to be let for at least 182 days a year to qualify for business rates. Those that fail to meet the threshold can instead become liable for council tax, including Pembrokeshire’s 125% second homes premium.
The issue was raised by Cllr Huw Murphy, who said the threshold had been “a disaster” for many self-catering businesses, particularly in rural and coastal communities that rely heavily on tourism.
He noted that Plaid Cymru pledged before the Senedd election in May to review the policy but said, more than 50 days after the election, there had been no indication of when that process would begin.
“Through speaking to those operating in the self-catering sector there is a clear need to reduce the 182-day threshold,” Cllr Murphy said.
He added that he continued to believe the requirement should be lowered to 140 days, a proposal he unsuccessfully brought before the council in 2023.
At the time, councillors opted instead to ask the Welsh Government to review the policy.
Responding to the latest request, Cllr Hodgson said she was happy to write to the First Minister on behalf of the council.
She said she understood a Welsh Government review was expected but was not aware of the timetable for it.
Urgency
Cllr Murphy said that since submitting his question he had been “inundated with emails” from constituents, which he said highlighted the urgency of reviewing the policy.
Pembrokeshire is one of several Welsh local authorities to levy a 125% council tax premium on second homes, significantly increasing the tax bill for owners of self-catering properties that fail to meet the Welsh Government’s annual letting threshold.
Support our Nation today
For the price of a cup of coffee a month you can help us create an independent, not-for-profit, national news service for the people of Wales, by the people of Wales.
Get more trusted Welsh news
Choose Nation.Cymru as a preferred source in Google News to see more of our journalism.
Let’s not forget this threshold is where a second home owner may be eligible for 100% small business rates relief and pay nothing at all towards local services. That’s only justifiable if they’re bringing a very regular supply of big spending visitors into the local economy all year round.