The Welsh Government has launched a consultation on proposed changes to the way tax rules for self-catering holiday let owners are applied.
Since April 2023, self-catering properties must be available for 252 days and actually let for 182 days each year to pay non-domestic rates instead of council tax.
The consultation says:
“The primary aim of this policy change was to ensure property owners are making a fair contribution and to maximise the use of property, to the benefit of local communities.
“This could include benefits arising from increased occupancy for short-term letting or the release of some properties for sale or rent as permanent homes for local people.
“Local taxation changes form part of the Welsh Government’s three-pronged approach to tackling the impact that large numbers of second homes and self-catering properties can have on communities and the Welsh language in some parts of Wales.”
It adds that many properties in all parts of Wales have met the new letting criteria.
The consultation states:
“The Welsh Government remains of the view that, for a property to be classified as non-domestic for local tax purposes, it should operate as a business for the majority of the year.”
Now the Welsh Government is proposing to enable an average of days let over multiple years to be taken as evidence of compliance, where 182 days are not achieved in the year prior to the date of assessment.
It says:
“It is recognised that a self-catering property may comfortably exceed 182 days letting in most years, but occasionally fall short by a narrow margin (e.g. due to a temporary drop in demand or late cancellation).
“In this scenario, the property would be liable for council tax for the period when compliance had lapsed. It would then be re-listed for non-domestic rates if the criteria were met again from a future date. This has the potential to result in frequent changes of classification for the same property over time, where the intended levels of occupancy are generally achieved (i.e. on average). That outcome would, in turn, result in financial uncertainty for the operator and local authorities.”
The Welsh Government is also proposing to enable an allowance of up to 14 days per year for charitable donations to count towards the letting criteria.
Subject to consideration of views submitted in response to the consultation, the Welsh Government says it intend to bring forward the legislation needed to make the proposed refinements and bring them into force on 1 April 2026.
The consultation is open until 20 November 2025 and can be found here.
