New proposals on the ‘182 day rule’ for holiday lets to pay rates instead of second homes council tax premiums are being suggested in a Welsh Government consultation.

Since April 2023, self-catering properties must be available for 252 days and actually let for 182 days each year – up from a previous 70 – to pay non-domestic rates instead of council tax.

Those failing to make the criteria are eligible to pay the second homes council tax premium.

Late last year, Pembrokeshire councillors voted to drop the council tax premium on second homes from 200 per cent, effectively a treble rate, to 150 per cent.

Prior to that, second-home owners in the county were charged a 100 per cent premium.

Under Welsh Government legislation, local authorities are able to increase the council premium on second homes to as much as 300 per cent, effectively a quadruple rate.

The Welsh Government is now seeking views on two key changes to the way the rules are applied, to give the tourism sector extra stability.

  • Allowing holiday let owners to use an average of 182 days let over several years, meaning those who narrowly miss 182 days letting in the latest year would remain on non-domestic rates if they had achieved it on average over two or three previous years.
  • Allowing up to 14 days of free holidays donated to charity to count towards the 182-day target.

The consultation also 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 when they move from non-domestic to domestic classification.

The consultation runs until November 20, with any legislation following this intended to take effect on April 1.

In Pembrokeshire, previous unsuccessful calls have been made to lower the ‘182 day rule’ to 140, in a 2023 notice of motion submitted by Cllr Huw Murphy.

Pembrokeshire currently has its own consultation on the level of the premiums for both second homes and empty properties, which runs to August 31.

The council consultation also seeks views on how any funding raised from the premiums in 2026-27 should be spent, and also whether Welsh Government should change the minimum number of days that a property must be let for in order to qualify for non-domestic rate self-catering accommodation tax status.

With the launch of the Welsh Government consultation, Cabinet Secretary for Finance and Welsh Language, Mark Drakeford said: “Tourism makes an important contribution to the Welsh economy and to Welsh life. 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.”