Welsh holiday home tax rules could be eased after a backlash from owners, as ministers open a review of the 182-day threshold for self-catering accommodation. The Welsh government will examine whether a modest cut to the rule would change how holiday properties are treated for business rates.
Under the current system, property owners pay higher council tax if their homes are not let for at least 182 days a year. Finance Minister Elin Jones said she also wants clearer and more reasonable exemptions to the rule. The consultation will look at whether the threshold sits at the right level and what effect a modest reduction might have.
The government is also proposing five possible exemptions for accommodation that cannot be used as permanent homes, including properties on owners’ farms. Jones said she had heard from businesses that contribute to local economies but still cannot meet the present threshold. She said the aim was to find a solution that works for businesses, local authorities and local areas, while keeping homes in communities and supporting tourism.
The policy has been a flashpoint in Welsh politics since it came into force in April 2023. It was one of the measures brought in to address second homes under the Labour-Plaid co-operation agreement in the last Senedd. Before that change, properties had to be available for 140 days and actually let for 70 days to qualify for business rates, a system that still applies in England.
Today’s Welsh rules are tougher. Properties must be available for at least 252 days and actually let for an average of 182 days over a two- or three-year period. If they do not meet that test, they can be treated as second homes and charged council tax, including an extra premium in some counties.
