Tourism leaders have welcomed the Welsh Government’s 12-week consultation on proposed changes to the tax rules for self-catering properties, including a review of the controversial 182-day letting threshold.

Mid Wales Tourism (MWT Cymru), which represents more than 600 tourism and hospitality businesses across Powys, Ceredigion and Meirionnydd, and the Wales Tourism Alliance (WTA) say the review is an ‘important and long-awaited opportunity to address concerns about the current policy.’

The consultation began on 31 July and will run until 23 October.

Self-catering properties in Wales may be classified for non-domestic rates rather than Council Tax if they meet specific letting criteria.

Since April 2023, properties must be available to let for at least 252 days a year and actually let for a minimum of 182 days to qualify for non-domestic rates.

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

It also proposes five new exemptions for self-catering properties that could not reasonably be used as permanent homes.

The exemptions could apply to properties that form part of a wider business, large multi-unit developments, properties subject to relevant planning restrictions, accommodation within the curtilage of the owner’s home and properties located on the owner’s farm.

Zoë Hawkins, MWT Cymru’s chief executive, said: “We welcome this consultation and the speed with which the new Welsh Government has brought it forward.

“We are pleased to see this recognised as an early priority and hope it signals a clear commitment to supporting a sector that makes a vital contribution to the rural economy.

“The policy in its current form has resulted in genuine tourism businesses being treated in the same way as second homes.

“Many are purpose-built units, farm diversification businesses or properties that form part of a family home and could not reasonably be used as permanent residences.

“The proposed exemptions are therefore hugely important.

“If introduced, we hope they will help ease the considerable financial pressures and uncertainty facing many families, businesses and communities across rural Wales.”

WTA chairman Rowland Rees-Evans said: “We know there are many self-catering businesses struggling because they have been unable to reach the 182-day threshold for a range of reasons.

“As a result, they have been faced with large Council Tax bills that they can ill afford.

“Welsh Government figures show that 40 per cent of these businesses are not achieving 182 days, but what the figures do not show is how many of the remaining 60 per cent are heavily discounting their prices simply to reach the target.

“This reduces profitability and threatens the future viability of those businesses.

“We also welcome the proposed exemptions included in the consultation and believe they could relieve significant pressure on small businesses if implemented.”

Finance Minister Elin Jones said: “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.”