The Welsh Government is reviewing the 182-day letting threshold used to classify self-catering properties for local tax purposes.

Since April 2023, self-catering properties have had to be available to let for at least 252 days and actually let for at least 182 days in the previous year to be subject to non-domestic rates rather than council tax. Those failing to achieve that pay a higher council tax rate, with a maximum potential premium of 300%.

About 40% of holiday lets in Wales have not met the letting criteria since the new rules were brought in, according to the previous Labour government, leaving some owners with bills running into several thousand pounds.

A new consultation will look at whether the 182-day threshold is set at the right level and what impact a modest reduction might have. The new Plaid Cymru government is also proposing five new exemptions for self-catering properties that could not reasonably be used as a permanent home: those 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.

Manifesto

Cabinet Minister for Finance, Elin Jones, says its 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,” adds Jones. “This consultation will help us find a solution that works better for everyone, including businesses, local authorities and local areas.”

Burdened

PASC UK (Professional Association of Self-Caterers UK) says the parameters are too high and welcomes the review. It adds: “It has of course come too late for many, and many have been burdened with completely disproportionate bills over the last four years. It’s an opportunity to put that right going forwards.”

Earlier this year, the government announced that landlords in Wales will need a licence for their short-lets from 2029, by proving their properties are fit for visitors.

The tax consultation runs until 23^rd October.

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