Welsh Government launches review of controversial holiday home tax rule

The Welsh Government announced a 12‑week consultation to re‑examine the 182‑day letting threshold that determines whether self‑catering properties are taxed as business rates or as higher‑rate council tax. Finance Minister Elin Jones said the review will consider a modest reduction to the threshold and five new exemptions for accommodation that cannot reasonably be used as a permanent home, such as properties on owners’ farms or subject to planning restrictions.

The rule, introduced in 2023 under a Labour‑Plaid co‑operation agreement, requires holiday lets to be available for at least 252 days and actually let for 182 days each year. Failure to meet the criteria subjects owners to a council‑tax premium that can reach 300 %, and about 40 % of holiday lets in Wales have struggled to comply, prompting calls for change from industry groups and local councils. The Professional Association of Self‑Caterers welcomed the review, while Reform UK questioned whether a modest reduction would provide sufficient support for the tourism sector.