Holiday Lets in Wales- The Big Changes For 2023!

The Local Taxation Policy, also know as the 182 day rule, came into effect in April 2023, and has caused considerable angst amongst some owners.

Home > Holiday Lets > Holiday Lets in Wales- The Big Changes For 2023!

If you own a holiday let in North Wales, you’ve probably been following the Welsh Government’s plans for changes to the rules known as ‘Local Taxation Policy’. These came into effect in April 2023 and have caused considerable angst amongst some owners.

What tax are we talking about?

Local Taxes, that is Business Rates and Council Tax levied by councils. The treatment of holiday lets for UK wide taxes (Income tax, Corporation tax etc.) has not changed. You can find out more in our guides on our website.

What is the Welsh Government trying to do?

There is a perception that holiday lets and second homes distort the local housing market, particularly in rural areas. Furthermore, some owners have in the past gained preferential holiday let status for their second homes whilst not exactly complying with the rules. Friends and family if you like. The aim of the rule changes is to level up the housing market whilst generating revenue for councils to improve services. All well and good in practice of course, but there is of course much debate over the effectiveness of the changes.

What exactly has changed?

Your Holiday let must now be –

available for letting on 252 days per year and actually let on 182 days per year.
let at market rates on a commercial basis.
not let for any period longer than 28 days.

These new rules are a huge increase on the previous 140/70 day rules.

Who checks?

The Valuation Office Agency (VOA) is responsible for assessing business rates in England and Wales. They are promising to check each property at least once every two years.

I meet the new rules – what changes for me?

For owners of holiday lets that are successfully meeting the new rules, there will be no change. You’ll still be charged business rates and be eligible for any applicable reliefs.

The VOA will assess you during 2023 and you’ll need to satisfy them that –

For the previous 12 months you did meet the 252 and 182 day rules
For the forthcoming 12 months your property will be available for 252 days.

I don’t meet the new rules – help!

If you don’t meet the new rules, then you will no longer be treated as a business and will be charged Council Tax instead of Business Rates. Not only is this more expensive in itself, but each local authority can charge a council tax premium of up to 300%!

Fortunately, nowhere in North Wales currently charges such an extortionate premium, but the direction of travel is only going one way.

Here are the current and proposed levels for North Wales;