Holiday let operators in Powys could see some relief from mounting financial pressures after the county council proposed easing council tax premiums on self-catering accommodation reclassified as second homes.
At a Cabinet meeting Powys councillors backed plans to introduce a discretionary council tax discount, removing the premium element from backdated bills for affected properties. If approved by full council on 14 May, the changes would apply retrospectively to April 2023 and could result in substantial refunds for some businesses. The development follows recent calls from Gwynedd Council to review and potentially reduce the threshold, reflecting wider concern about the impact of the policy on rural communities heavily dependent on tourism.
Under current rules, self-catering properties in Wales must be let for at least 182 nights a year to qualify for business rates. Those that fall short are moved into council tax and may face second-home premiums, which vary by county but may be up to 300%.
By comparison, equivalent thresholds in England and Scotland require just 70 nights of letting, raising concerns about competitive disadvantage. Welsh Government guidance issued in 2023 makes clear that local authorities have discretionary powers regarding how they apply council tax premiums, encouraging councils to take account of local economic impacts, including tourism.
The guidance also recognises farm diversification – such as the conversion of barns into holiday lets – and encourages authorities to reduce or remove premiums where properties are unsuitable for permanent occupation or where charges may cause financial hardship.
If the Cabinet proposal is approved, Powys would be the first council to use discretionary powers in this way, removing the premium element from backdated bills while retaining standard council tax.
Gwion Llwyd, who runs Dioni Holiday Cottages and leads the Let’s Review 182 campaign, said the latest developments offer grounds for “cautious optimism”.
He said:
“What we’re seeing now is local authorities starting to respond to how this policy is working in practice.
“Many small businesses are struggling to meet the threshold not because they’re doing anything wrong, but because of the way the market operates, particularly in rural areas.
“Operators are facing bills they simply can’t afford, and we’re starting to see increasing numbers stepping back or closing altogether. That has real consequences for rural communities that depend on tourism.”
Llwyd, who also runs a hill farm in Dyffryn Ardudwy, Gwynedd, launched the Let’s Review 182 campaign in October 2025 to highlight the real-world impact of the policy on small tourism businesses and local economies in Wales.
In practice, many operators in rural areas of Wales struggle to meet the requirement due to shorter holiday seasons, the campaign argues. Welsh Government figures indicate that around 40% of self-catering properties in Wales have failed to meet the threshold.
Powys Council data shows the number of self-catering properties on the business rates list has fallen by 28% since April 2023 as properties have been reclassified. It is unclear how many have since exited the market entirely.
