The Welsh Government has launched a 12-week consultation on changes to the criteria used to classify self-catering properties for local tax purposes, including a review of the 182-day letting threshold.

Self-catering properties may be subject to non-domestic rates rather than council tax, but only if they meet certain letting criteria.

Since April 2023, this has required that a property is available to let for at least 252 days and actually let for at least 182 days in the previous year.

The consultation will explore whether the 182-day threshold is set at the right level and what impact a modest reduction might have.

In addition, five new exemptions are proposed for self-catering properties that could not reasonably be used as a permanent home.

These could cover properties which are part of a wider business, large multi-unit properties, properties subject to a relevant planning restriction, properties within the curtilage of the owner's home, and properties on the owner's farm.

Cabinet Minister for Finance, Elin Jones said: "Our manifesto included a commitment to keep the 182-day letting threshold under review and create clear and reasonable new exemptions where self-catering accommodation would not qualify as a private home.

"I have heard representations from a number of businesses that are making meaningful contributions to their local economies but are unable to meet the current threshold.

“This consultation will help us find a solution that works better for everyone, including businesses, local authorities and local areas.

"I am committed to getting the balance right – keeping homes in our communities while giving tourism the support it needs to thrive."

The consultation will run until October 23, 2026 and is available here.

The Welsh Government intends to complete a review of the 182-day threshold by the end of 2026.

Subject to the outcome of the consultation and the threshold review, legislation would be required to implement any changes, with an intended commencement date of 1 April 2027.

Self-catering properties that meet the current letting criteria are subject to non-domestic rates. Those that do not are classified as domestic properties and liable for council tax.

Between 2013 and 2023, the number of self-catering properties subject to non-domestic rates almost trebled, from around 4,000 to over 11,000.

This led to concerns about the impact of an over-supply in some areas, which the increased letting threshold was intended to respond to.

Kerry Ferguson, Plaid Cymru Senedd election candidate Ceredigion Penfro
Kerry Ferguson, Plaid Cymru Member of the Senedd for Ceredigion Penfro stated recently: “Since becoming a Member of the Senedd, a recurring issue that reaches my inbox and surgeries is the 182-day occupancy threshold for self-catering accommodation.” (Matthew Horwood)

Kerry Ferguson, Plaid Cymru Member of the Senedd for Ceredigion Penfro stated recently: “Since becoming a Member of the Senedd, a recurring issue that reaches my inbox and surgeries is the 182-day occupancy threshold for self-catering accommodation.

“I support the intention of the policy's outcomes, but the current implementation, especially the threshold, needs reviewing to balance the outcomes and impacts on our local and tourist communities.

“We support efforts to increase housing for local people, but the policy must also be fair to small, family-run tourism businesses that are vital to our rural economy. This policy is having huge emotional and mental strain, and is putting small businesses into incredibly difficult positions.”