The Welsh Government has launched a 12-week consultation on changes to the criteria used to classify self-catering properties for local tax purposes, including a review of the 182-day letting threshold.
Self-catering properties may be subject to non-domestic rates rather than council tax, but only if they meet certain letting criteria. Since April 2023, this has required that a property is available to let for at least 252 days and actually let for at least 182 days in the previous year.
The consultation will explore whether the 182-day threshold is set at the right level and what impact a “modest” reduction might have.
In addition, five new exemptions are proposed for self-catering properties that could not reasonably be used as a permanent home.
These could cover properties which are part of a wider business, large multi-unit properties, properties subject to a relevant planning restriction, properties within the curtilage of the owner's home, and properties on the owner's farm.
The consultation will run until 23 October 2026.
Welsh Government 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 Professional Association of Self-Caterers UK (PASC UK Cymru) has welcomed the consultation, which it says “marks the first substantive opportunity to reconsider one of the most damaging policies to affect Welsh tourism businesses in recent times”.
While the consultation proposes a lower threshold than the current 182 days, PASC UK said it believed the proposed range remains too high for many genuine self-catering businesses operating across Wales and is encouraging members and the wider sector to submit evidence during the consultation period.
Since the threshold was introduced, PASC UK Cymru has consistently argued that a single national occupancy target fails to reflect the realities of Wales' visitor economy, where seasonality, geography and differing property types mean that many viable businesses cannot achieve 182 occupied nights.
The association's research suggests that the number of self-catering businesses recorded by the Valuation Office Agency in Wales has fallen by more than 30% since the policy came into effect, compared with around 12% in England over the same period. The organisation argues that this decline has had significant consequences not only for accommodation providers, but for pubs, restaurants, visitor attractions and local supply chains that depend upon tourism.
Alistair Handyside MBE, Executive Chair of PASC UK, said:
“We welcome the fact that the Welsh Government has listened to the evidence and recognised that the current 182-day threshold requires review. That is an important step forward and one which reflects constructive engagement with new Ministers, Members of the Senedd and officials – a welcome change to the stubbornness of the last Welsh Government.
“However, the consultation is only the beginning. While the proposed range is undoubtedly lower than many feared, we remain concerned that it is still too high for a significant proportion of genuine self-catering businesses operating in rural and coastal Wales.”
Nicky Williamson, PASC UK’s Welsh Policy Adviser, said:
“This consultation must be driven by evidence. We want every operator to explain how the current rules affect their business and why a realistic threshold is essential if Welsh tourism is to remain competitive.
“Our objective has never been to remove the distinction between genuine holiday businesses and second homes. It is to ensure that viable tourism businesses are not penalised by an occupancy requirement that many simply cannot achieve.”
PASC UK Cymru will shortly publish detailed consultation guidance to help operators prepare evidence-based responses and will host a sector-wide webinar on Wednesday 5 August at 10am to explain the proposals and answer questions. The association is encouraging every self-catering operator in Wales to participate.
Alistair added:
“Government has opened the door, this is our one chance to save the sector in Wales.”
North Wales Tourism CEO Jim Jones welcomed the review but questioned the length of the consultation, saying that Welsh Government already had evidence of the damage the threshold had caused and therefore should “get on with reducing the threshold”.
He said:
“The Welsh Government’s review of the 182-day occupancy rule is welcome, though long overdue. In all my years working in tourism, this has been the cruellest policy I have encountered. It has destroyed many of our members' businesses and livelihoods, and has caused significant mental health harm.
“We now await common sense to prevail, and hope the figure is cut substantially enough for people to regain the confidence to run a business. Suggestions of a reduction to 160 days are still nowhere near acceptable.”
The Wales Tourism Alliance welcomed the consultation, saying that the tourism industry had been asking for a review of the policy for some time.
Chairman Rowland Rees-Evans said:
“It is pleasing that the Welsh Government is going to review this policy. We know that there are many self catering businesses struggling because they have failed to reach the 182 threshold for a number of reasons and as a result have been hit with large council tax bills, which they can ill afford.
“The Government’s figures show that 40% of these businesses are not achieving 182 days, but what the figures don’t show us is how many of the other 60% are discounting heavily just to reach the target. This obviously reduces profitability and threatens the future viability of those businesses.
“WTA also welcomes the review of exemptions as part of the consultation and is certain that if these are implemented it will relieve the pressure on those small businesses. It is important that as many operators as possible reply to this consultation.”
