Owners of self-catering holiday rentals in Wales could get a reprieve from “brutal” tax rules that stakeholders say have been harming the industry, if new proposals from the Welsh government are approved.
Council tax changes introduced in 2023 made it 80% more difficult for holiday accommodation owners to qualify for lower business tax rates. If rental properties are not available for 252 days per year, and not rented for at least 182 days, the new rules state owners must pay taxes meant for second homes. Meanwhile, in England, the previous thresholds of 70 nights rented out of 140 available per year remain in place.
Intended to alleviate a local housing crisis by cutting the number of second homes and gaining control over the holiday let sector, the rule change has come in for much criticism. According to the Professional Association of Self-Caterers (PASC), rental property owners have been abandoning their businesses as they can no longer make the business model work. Some have been faced with tens of thousands of pounds in backdated tax bills.
Consultation published by @WelshGovernment, ends 20 November, on the 182 day tax rule, proposing small changes to support tourism and hospitality businesses.
— Welsh Treasury (@WelshTreasury) August 28, 2025
More👇#WelshTaxes #WelshBudgethttps://t.co/b9xdbM7wQU pic.twitter.com/tznaKWwISp
Now the Welsh authorities appear to be relenting. A consultation published on 28 August 2025 is seeking to introduce more flexibility for property owners by proposing a “12-month grace period before they may have to pay higher council tax rates when they move from non-domestic to domestic classification.”
What’s more, to “give the sector extra stability”, the rules would be eased to allow the 182-day rental minimum to be reached over “several years” if needed, and to include up to 14 days of “free holidays donated to charity to count towards the 182-day target.”
Cabinet Secretary for Finance and Welsh Language, Mark Drakeford, has explained the consultation’s proposals, noting that “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.”
Your Welsh Labour Government has delivered £26 billion for Wales. pic.twitter.com/kVuSWmUKU0
— Welsh Labour (@WelshLabour) March 4, 2025
Acknowledging the “important contribution to the Welsh economy” made by tourism, 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.”
The consultation is open to public responses until 20 November 2025.
