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

Under the current rules, introduced in April 2023, self-catering accommodation must be available to let for at least 252 days each year and actually let for at least 182 days in the previous 12 months to qualify for non-domestic rates rather than council tax. These requirements have been widely criticised by the tourism sector, with many businesses arguing that the threshold fails to reflect the seasonal nature of tourism in Wales.

The consultation will explore whether the 182-day threshold is set at the right level and proposes five new exemptions for self-catering properties that could not reasonable be used as a permanent home. As stated on the consultation website, five types of exemption from the application of the historic letting criteria are proposed, in respect of the following circumstances:

• Property which is part of a wider business;
• Large multi-unit property;
• Property subject to a relevant planning restriction;
• Property within the curtilage of the owner’s home; and
• Property on the owner’s farm.

The proposed exemption for accommodation on working farms is particularly significant. Many farming families have diversified into self-catering accommodation, often in response to long-standing government encouragement to develop additional income streams. However, the current 182-day rule has proved difficult for many businesses to meet, particularly where demand is highly seasonal or affected by poor weather and wider economic pressures. For some farms, the rules have placed otherwise successful diversification enterprises at risk.

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.”

Rachel Evans, Director for Wales, said:

“Reviewing the 182-day letting rule is an important opportunity to create a fairer system that supports both rural communities and the tourism economy.

"A reduction in the threshold, or greater flexibility in how the threshold is assessed, could help tourism businesses that experience seasonal fluctuations, poor weather, cancellations or a temporary fall in visitor numbers. Many rural and coastal businesses rely heavily on peak holiday periods and may struggle to achieve 182 occupied nights every year, even when they are operating commercially and contributing significantly to the local economy.

"A more proportionate threshold could provide greater financial certainty and reduce the risk of businesses being moved unexpectedly from non-domestic rates to council tax. This could help owners retain staff, invest in improvements and continue operating throughout the year. It may also encourage investment in new accommodation, helping to maintain the quality and range of visitor accommodation available across Wales”.

The Countryside Alliance encourages members and rural businesses with experience of the current rules to respond to the consultation and explain how the existing threshold has affected them. Evidence from those directly impacted will help ensure the Welsh government fully understands the practical consequences for rural tourism and farm diversification. We will be reaching out to our members and supporters to ask you to provide us with the evidence to support our submission.

The consultation will run from the 31 July until 23 October 2026 and is available here: Classification of self-catering properties for local tax purposes | GOV.WALES