Welsh Government reviews holiday let tax threshold in bid to balance tourism and housing

Daniel Bevan - Editor

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The Welsh Government has launched a 12-week consultation on changes to the tax rules for self-catering holiday lets, including a review of the 182-day letting threshold used to determine whether properties qualify for non-domestic rates instead of council tax.

The consultation will examine whether the current requirement for holiday lets to be occupied for at least 182 days a year remains appropriate and what impact a modest reduction could have on businesses, local authorities and communities.

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 qualify for non-domestic rates.

The Welsh Government is also seeking views on five proposed exemptions for self-catering properties that could not reasonably be used as permanent homes.

The proposed exemptions cover properties that are part of a wider business, large multi-unit properties, those subject to relevant planning restrictions, accommodation within the curtilage of the owner’s home, and properties on the owner’s farm.

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.”

Paul Davies MS, Welsh Conservative Shadow Minister for the Welsh Language, Culture, Tourism and Sport, said: “Almost 100 days into office and Plaid Cymru’s answer is yet another review.

“Tourism businesses needed ministers to get on with fixing this damaging policy before the summer season, not launch a consultation when holiday lets and visitor attractions are already at their busiest.

“The 182-day rule has been causing problems for years. Businesses, representative organisations and opposition parties have repeatedly warned ministers about the damage it is doing to the tourism economy. Nobody needs another three months to discover there is a problem.

“We will respond in full to the consultation and make the case for reducing the threshold to 105 days, as the Welsh Conservatives have consistently argued.

“Today’s announcement is another reminder that this government seems far more interested in commissioning reviews than delivering decisions. Wales’ tourism industry cannot afford to spend another summer waiting for ministers to make up their minds.”