Controversial tax rules for owners of self-catering holiday accommodation in Wales look set to change following proposals put forward by the Welsh government. Since 2023, self-catering properties must be available for 252 days and let out for 182 days each year to pay non-domestic rates instead of the higher council tax. The Welsh government is now proposing changing this to an average of 182 days let over several years. A total of 40% of holiday lets in Wales have not met the letting criteria since the new rules were brought in from 2023. The new proposals would allow for up to 14 days of free holidays donated to charity to count towards the 182-day target. A consultation, open until 20 November, asks whether councils should consider giving businesses more time to adjust, such as a 12-month grace period before they may have to pay higher council tax rates. Subject to the outcome of the consultation, the legislation would need to be passed in the Senedd to implement these proposals, with changes intended to take effect on 1 April 2026. Cabinet Secretary for Finance and Welsh Language Mark Drakeford said the Welsh government had “listened” to feedback and was proposing “small changes” to the rules. Drakeford said: “Wales has so much to offer, and we want to ensure we realise that potential in a way that achieves a balance between our communities, businesses, landscapes and visitors. We work closely with tourism and hospitality businesses to help address the challenges they face, while ensuring everyone makes a fair contribution towards local economies and funding public services. While most holiday let owners are already meeting the new rules brought in from 2023, with 60% of properties meeting the letting criteria, we have listened to those working in the sector and are proposing small changes to the current rules to support them.” The Professional Association of Self-Caterers (Pasc) criticised the latest announcement, calling it a “token gesture that fails to address the real crisis facing Welsh tourism businesses”. Welsh Conservative Gareth Davies said the 182-day rule was “harming our tourism industry” and pledged that a Conservative government in the Senedd would reduce the threshold to 105 days. A Plaid Cymru spokesperson said they welcome “the increased flexibility for owners of holiday lets, however the occupancy threshold remains unchanged and continues to be a source of anxiety for many Welsh small businesses, particularly in rural Wales”. Director of Pasc UK Cymru Nicky Williamson said “whilst members will welcome the ability to count charity weeks again, this is nowhere near enough”. She added: “For three years we have continually presented the Welsh government with data showing the damage caused by this policy – yet they continue to ignore the reality. Tourism in Wales has lost over a quarter of its overnight visitors since this policy began, yet the threshold for businesses hasn’t changed, leaving owners punished for something completely outside their control. Business owners are working harder than ever just to stand still, with 85% driven to discount to try to achieve the threshold. The 182 threshold is the problem and this must be reduced significantly.” Wendy Kennedy, 63, who has a holiday let in her home, said the announcement “makes no difference to us”. She said she “doesn’t like to think about” the possibility of having to pay a second homes tax if they did not meet the threshold. Carol Peet, founder of a buying agency, said the proposed changes don’t “go far enough”. She said the 182-day rule was “impacting the local economy, it’s impacting locals’ jobs because there are a lot of properties up for sale and they’re not selling, and so they’re not being used as holiday lets”.
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