July 31, 2026 - 161 views
The Welsh Government has launched a 12-week consultation on possible changes to the rules that determine whether self-catering holiday accommodation is liable for council tax or non-domestic business rates.
The review, announced today, includes a fresh look at the controversial 182-day letting threshold, which has been a source of concern for many tourism businesses since it was introduced in April 2023.
Under the current rules, self-catering properties can qualify for non-domestic rates rather than council tax if they are available to let for at least 252 days a year and have been commercially let for a minimum of 182 days during the previous 12 months.
The Welsh Government is now asking whether the 182-day threshold remains appropriate and whether a modest reduction could better reflect the realities faced by some tourism businesses.
The consultation also proposes five new exemptions for self-catering properties that could not reasonably be used as permanent homes. These include accommodation that forms part of a wider tourism business, large multi-unit holiday complexes, properties subject to planning restrictions preventing permanent occupation, accommodation within the grounds of an owner's home, and holiday lets located on working farms.
Cabinet Secretary for Finance, Elin Jones, said the Welsh Government had committed in its election manifesto to keep the threshold under review while introducing sensible exemptions where appropriate.
She said she had heard from a number of businesses making valuable contributions to local economies but struggling to meet the current letting requirement.
"I am committed to getting the balance right – keeping homes in our communities while giving tourism the support it needs to thrive," she said.
The consultation comes after years of debate over the impact of Welsh Government measures aimed at tackling housing affordability in popular tourist areas.
Supporters of the existing rules argue they help prevent properties being registered as businesses primarily to benefit from business rates relief while remaining empty for much of the year. They say the measures encourage more homes to remain available for local people and help councils address housing shortages in communities where second homes and holiday accommodation have reduced the supply of permanent housing.
However, the policy has faced sustained criticism from tourism organisations, holiday letting businesses and rural economy groups. They argue that the 182-day threshold is unrealistic for many genuine holiday accommodation providers, particularly in areas with highly seasonal visitor demand or where external factors such as poor weather, transport disruption or economic pressures have affected bookings.
Industry representatives have warned that some legitimate businesses have been forced onto higher council tax bills despite operating commercially, adding financial pressure at a time when many tourism operators are already facing increased costs. They have also argued that tourism businesses play a vital role in supporting local jobs, shops, restaurants and attractions across Wales.
The proposed review has been welcomed by a number of tourism bodies, which have long called for greater flexibility and recognition of the different trading conditions faced by businesses across the country. At the same time, housing campaigners are expected to continue urging ministers not to weaken measures they believe are helping to tackle the availability of homes for local residents.
The consultation runs from today until 23 October 2026, with businesses, local authorities, residents and other interested parties invited to share their views before the Welsh Government decides whether any changes should be made.
