The Welsh government is reviewing its tough holiday property tax rules after owners warned the system is “brutal” and damaging tourism businesses.

Since 2023, self-catering properties in Wales have had to meet some of the strictest thresholds in the UK to qualify for business rates instead of council tax. To stay eligible, homes must be available for let for at least 252 nights a year and actually rented for 182 nights.

By comparison, in England the bar is far lower: just 140 nights available and 70 nights let.

Owners who fail to meet the Welsh target are pushed back onto council tax, which can be much more costly. Many say this makes it impossible to keep their businesses afloat, especially in quieter seasons.

Now, following years of complaints, ministers are consulting on possible changes. Proposals include:

Averaging occupancy across several years, so owners who narrowly miss the 182-day target one year aren’t automatically penalised.

Allowing up to two weeks of charity use to count toward the requirement.

The consultation is open until 20 November.

Nicky Williamson, who represents operators through the Professional Association of Self-Caterers (PASC) Wales, said many members are struggling. Without holiday lets, she warned, the tourism sector could collapse: “If tourism failed, then the number of people employed will start to lose jobs. Pubs and cafes are not going to survive.”

She added that the current regime is taking a toll on owners’ mental health.

The government defends the policy as a way of ensuring second-home owners contribute fairly to local communities, where affordable housing is in short supply.

Finance secretary Mark Drakeford acknowledged the concerns but stressed the need to balance housing with tourism. “While most holiday let owners are already meeting the new rules, we have listened to the sector and are proposing small changes to support them,” he said. Photo by Jonathan Wilkins / Welsh Government office 2 / CC BY-SA 2.0, Wikimedia commons.