New proposals have been suggested to adjust the way tax rules for self-catering holiday let owners are applied.

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

The rules were brought in to ensure property owners make a fair contribution to their local community.

The 182-day rule, which means properties must be let out for at least that amount of time every year to qualify for business rates and not council tax, has been met with criticism from the industry.

Speaking last year, Suzy Davies from the Welsh Tourism Alliance, said: “This treats bona fide local holiday let businesses as second homes, for the purposes of local taxation, if they cannot show 182-days occupancy.

“This means they are denied business rate relief and required to pay domestic council tax instead, and at increasing levels of premium in some local authority areas.

“However they will still be subject to the same costs and regulatory requirements, including national tax, as other businesses, which is both unique and legally incoherent.

“We have no argument with Welsh Government trying to manage the number of second homes – but these businesses are not second homes.”

Announcing a consultation on Thursday, 28 August, the Welsh Government said it is seeking views on two key changes to the way the rules are applied, to give the sector extra stability:

The first is allowing holiday let owners to use an average of 182 days let over several years.

This means 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.

The second part is consulting on 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.

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.

“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.

“While most holiday let owners are already meeting the new rules brought in from 2023, with 60 per cent 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.”

The Welsh Government consultation will run until the 20 November and will then be discussed by Senedd members at a later date.