Consultation on the proposed refinements to the classification of self-catering properties for local tax purposes: summary of responses

Through this consultation, the Welsh Government sought views on proposed refinements to the treatment of self-catering properties for local tax purposes. 

From 1 April 2023, a self-catering property is required to have been available to let for 252 days and actually let for 182 days within any 12-month period, to be classified as non-domestic (and liable for non-domestic rates) rather than domestic (and liable for council tax). The Valuation Office Agency (VOA) is responsible for assessing compliance with the letting criteria and classifying properties for local taxation purposes. 

Following full implementation of the new criteria by the VOA, around 6,500 self-catering properties remained on the rating list. This is 60% of the number listed in April 2023 and not far below the 7,000 listed prior to the substantial increase in the number of properties meeting the previous letting criteria between April 2019 and April 2023. 

The Welsh Government has developed 2 specific proposals to refine the way the letting criteria are applied and also sought views on the merits of a stepped transition to council tax for properties reclassified as domestic. These proposals respond, in the manner considered appropriate, to matters raised by the self-catering sector during implementation of the new letting criteria.

The consultation was open for a 12-week period, from 28 August until 20 November 2025.

In total, the consultation received 1,211 responses from a range of stakeholders, including a large number of individual self-catering operators. A full list of respondents is included in annex a.

A summary of the responses received is provided below, focussing on the points directly relevant to each individual question. Wider comments about the letting criteria and related matters, such as their impacts and administration, are summarised with the responses to question 7. The summary does not aim to capture every point raised by respondents, but to highlight the key themes.

Some respondents did not answer every question. All percentages are based on responses to the relevant question, rather than the total number of respondents to the overall consultation.

Question 1:Do you support the proposal to enable days let to be averaged over multiple years?

The question was answered by 1,198 respondents, of which 63% supported the proposal and 35% did not. The remainder (2%) commented without specifying whether they supported the proposal. Specific comments were made by 885 respondents.

Many respondents who supported the proposal confirmed that it would assist operators which exceed 182 days letting in most years, but may occasionally fall short by a narrow margin. A range of reasons for possible lapses of compliance were cited, including temporary changes in demand, late cancellations and the seasonal nature of tourism.

A large proportion of respondents who supported the proposal also highlighted their view that the 182-day letting requirement is too high and should be lowered. Some respondents suggested additional allowances to account for specific circumstances (e.g. bad weather and property maintenance), whilst a small number were of the view that averaging should be enabled over a longer timeframe. Some comments in favour of the proposal raised concerns about how easily it would be administered.

The primary concern from most respondents who did not support the proposal was focused on their view that the 182-day letting requirement is too high. Rather than being explicitly against the proposal, these respondents were generally of the view that averaging the days let over multiple years would provide a limited benefit for the self-catering sector and does not address their main concern. A small number of respondents did not appear to understand that, rather than being a new requirement, the proposal could only benefit an operator whose compliance would otherwise lapse based on their latest year of letting.

Some respondents did not support the proposal because they were of the view that operators should be required to meet the criteria in each year. These respondents were concerned that any flexibility could limit the effectiveness of the policy changes introduced in April 2023. 

Question 2:Do you support the proposal for an allowance of charitable donations to count towards the letting criteria?

The question was answered by 1,181 respondents, of which 70% supported the proposal and 29% did not. The remainder (1%) commented without specifying whether they supported the proposal. Specific comments were made by 704 respondents.

Most respondents who supported the proposal stated it would benefit self-catering operators and the wider public. Some operators confirmed that they already make charitable donations, welcoming the proposed allowance counting towards the letting requirements. There were some suggestions for the proposed allowance to be more broadly defined (e.g. to include donations made through other organisations or directly to families with certain circumstances), whilst a small number of respondents proposed an allowance of longer than 14 days. Comments about the financial impact of providing charitable donations were also made, noting that these would come at a cost to operators and be less preferrable than letting on a commercial basis. There were also suggestions for additional allowances to cover a range of other circumstances which do not result in letting (e.g. forced business closure, property refurbishments and illness). A small number of respondents who supported the proposals raised concerns about how easily the allowance would be administered.

Most respondents who did not support the proposal were operators of the view that it would not benefit them, because they do not make charitable donations. Specific comments focused on the costs to the operator of letting a property free of charge (e.g. loss of earnings, utilities, laundry, cleaning and wear and tear). A small number of objections to the proposal were based on a misunderstanding that providing charitable donations would be a specific requirement, rather than an optional allowance for operators. Some comments raised concerns about the addition of complexity or administration of the proposal.

A small number of respondents who did not support the proposal were concerned that any additional allowance or flexibility for operators could limit the effectiveness of the policy changes introduced in April 2023.

Question 3:Does the proposal to require donations to be made through a registered charity achieve the policy intent?

The question was answered by 1,130 respondents, of which 36% agreed the proposed requirement aligned with the policy intent and 62% did not. The remainder (2%) commented without specifying whether they agreed. Specific comments were made by 555 respondents.

Most respondents who agreed the requirement for eligible donations to be made through a registered charity would align with the policy intent did not comment further or confirmed their view that this would be necessary to ensure the allowance is not open to abuse. A small number of supportive comments advocated for a widening of scope to include donations made through other organisations which may not be registered charities, such as schools, youth groups and church groups.

Respondents who did not agree fell into two distinct groups. The largest group (36% of respondents) were generally in favour of the proposed allowance, but of the view that the scope should be widened to include other types of organisation which may not be charities or direct donations from operators to beneficiaries of their choosing. The smaller group (26% of respondents) did not generally support the proposed allowance, based on their response to question 2. Some respondents who did not support the proposed allowance were concerned that it would be open to abuse, even if limited to donations made through a registered charity. As with responses to question 2, a small number of objections were based on a misunderstanding that providing charitable donations would be a specific requirement rather than an optional allowance.

A small number of respondents were uncertain as to whether the proposed approach would achieve the policy intent. Some requested further guidance to better understand what would constitute an eligible charitable donation.

Question 4:Do you agree with the Welsh Government's intention to encourage local authorities to support self-catering operators whose properties have moved from non-domestic rates to council tax, by charging the standard rate of council tax for 12 months before any premium may apply?

The question was answered by 1,180 respondents, of which 84% supported the proposal and 15% did not. The remainder (1%) commented without specifying whether they supported the proposal. Specific comments were made by 761 respondents.

A large proportion of respondents who supported the proposal confirmed their view that operators should be given time to adjust to additional costs, where they become liable for council tax. Many operators were concerned about the impact of having to immediately pay any council tax premiums if they no longer met the letting criteria, with a small number suggesting a transition longer than 12 months.

Among respondents who supported the proposal (and some who did not), many (over 220) were of the view that local authorities would not make use of their discretionary powers as proposed and instead suggested that the Welsh Government should legislate for an additional statutory exception from a premium. Of the 12 local authorities which responded, half agreed with the proposal and half did not. Five local authorities, including some which supported the proposal, suggested the Welsh Government should legislate for a stepped transition to council tax if it is intended to apply consistently across Wales.

Some respondents did not support the proposal because it would not address their view that the 182-day letting requirement and maximum council tax premium are too high, rather than being explicitly against the underlying principle of the stepped transition. Small numbers of respondents who supported the principle, but not the specific proposal, suggested a transition longer or shorter than 12 months, depending on their perspective.

Most respondents who did not support the principle of the proposal were of the view that a stepped transition to council tax should not be provided and, if the letting criteria are not met, it is right that operators may be subject to a council tax premium straight away. A small number suggested that all self-catering properties should be subject to council tax regardless of letting criteria.

Question 5: What, in your opinion, would be the likely effects of the proposals on the Welsh language? We are particularly interested in any likely effects on opportunities to use the Welsh language and on not treating the Welsh language less favourably than English.

1. Do you think that there are opportunities to promote any positive effects?

2. Do you think that there are opportunities to mitigate any adverse effects? 

Relevant comments were provided by 842 respondents. Many respondents were of the view that the proposals would not have any effects on the Welsh language.

A small number of respondents stated that the proposals, by supporting stability in the self-catering sector, would enable positive impacts on the Welsh language. Related comments highlighted a range of measures that are undertaken by operators to support the use of the Welsh language, including bilingual material provided to guests.

A large number of comments were made, generally by self-catering operators, about negative impacts upon the language resulting from a broader range of Welsh Government policies that impact upon the tourism industry. Other contrasting comments highlighted concerns about the impact of high numbers of self-catering properties on Welsh speaking communities.

Question 6: In your opinion, could the proposals be formulated or changed so as to:

1. have positive effects or more positive effects on using the Welsh language and on not treating the Welsh language less favourably than English; or

2. mitigate any negative effects on using the Welsh language and on not treating the Welsh language less favourably than English?

Relevant comments were provided by 677 respondents. Many respondents were of the view that no changes were necessary, as the proposals would not have any effects on the Welsh language.

A large number of self-catering operators suggested that reducing the 182-day letting requirement would improve stability in the sector and, in turn, have positive impacts upon the Welsh language. Some respondents highlighted actions that could be taken by self-catering operators to improve the use of Welsh, including better use of bilingual materials. A range of comments highlighted wider policy levers, such as supporting the tourist industry or providing more housing.

A small number of respondents raised concerns that the proposals would negatively impact upon the Welsh language, through an increased proliferation of self-catering properties in primarily Welsh speaking communities.

Question 7: We have asked a number of specific questions. If you have any related points which we have not specifically addressed, please use this space to record them

Further comments were provided by 874 respondents. Most respondents reiterated their support for or concerns with the proposals, as set out in response to previous questions. The below summary also reflects common views shared in response to earlier questions, which were not directly relevant to the specific focus.

Self-catering operators generally took the opportunity presented by this consultation to reiterate their opposition to the 182-day letting requirement. This was a common theme throughout the consultation, raised by a large majority of respondents. Just over 10% of respondents raised a formal objection to the continuation of this requirement in its current form. Some respondents made specific suggestions for lower alternatives. Where operators supported the individual proposals in the consultation, this was often caveated with a view that they would have limited effect in addressing the primary concerns of the self-catering sector.

Many operators described circumstances which make it more difficult for them to achieve 182 days letting per year (or do so consistently), including lower demand for inland rural locations and larger properties, fluctuations in visitor numbers, and trends towards stays shorter than a week. Some stated that seeking to maximise lettings meant working full-time to undertake all activities associated with running a self-catering business. A range of comments were made about the direct impacts on operators, including increased costs where they become liable for council tax, discounting to increase or maintain lettings and increased stress.

A large number of comments focused on concerns from the self-catering sector about policies beyond the existing local taxes. There was a common view from the self-catering sector that, when considered in the round, the combined impacts of a range of devolved and non-devolved policy changes were affecting the viability of their businesses, due to increased cost and regulatory burdens. Some respondents anticipated wider indirect impacts on tourism and the local economy in some areas, if capacity in the self-catering sector is reduced.

Some respondents commented on the administration of the letting criteria, including concerns about the time taken to fully implement the changes introduced on 1 April 2023 and backdated council tax bills received by some operators. There was a related concern that few local authorities have used their discretion to limit the impact on operators with certain circumstances, where premiums are applied to self-catering properties liable for council tax.

Comments were also made about the general approach to classifying self-catering properties for local tax purposes. Many operators were of the view that the 182-day letting requirement is an arbitrary means of determining whether a self-catering property is liable for council tax and may be treated in the same way as a second home where a premium applies. Suggestions for alternative approaches included differentiating between properties which could only be used as holiday homes and those that would otherwise be affordable local housing, by taking account of factors such as planning conditions.

There were also comments from other stakeholders who remain concerned about the impacts of large numbers of self-catering properties on communities and the Welsh language in some areas. Some suggested that all self-catering properties should be liable for local taxes in some form, either through council tax or making them ineligible for Small Business Rates Relief.

The Welsh Government acknowledges the range of views put forward in response to this consultation. We recognise the strength of feeling among self-catering operators about the local tax system and our policy position is set out in the introduction to the consultation. The Welsh Government remains of the view that, for a property to be classified as non-domestic for local tax purposes, it should be let for the majority of the year. Our specific proposals respond to the matters raised by the self-catering sector during implementation of the new letting criteria, as reiterated in many consultation responses from operators. 

The proposed refinements to the application of the letting criteria could only help, never hinder, an operator whose compliance would otherwise lapse. This is intended to support ongoing stability in the self-catering sector. A broader range of allowances for certain circumstances, as suggested by some respondents, would risk undermining the overall policy intent for the letting criteria. The proposal to enable days let to be averaged over multiple years takes account of a broad range of circumstances which may affect operators to varying degrees and at different times. The proposed allowance for charitable donations is intended to provide certainty to operators who wish to provide this wider public benefit without risking their ability to meet the letting criteria, ensuring this is a viable option rather than an obligation. 

A stepped transition from non-domestic rates to council tax would support the minority of operators whose compliance with the letting criteria does still lapse. Following consideration of the consultation responses, we have decided to legislate for an exception from a council tax premium of the type proposed, to ensure it is applied on a consistent basis across Wales. It would be intended for the stepped transition to begin from 1 April 2027.

Overall, the consultation proposals received majority support. The Welsh Government will bring forward the legislation required to implement the proposals.

Responses were received from the following:

• Awaze
• Bag of Receipts Bookkeeping Services
• Barmouth Town Council
• Barn Court Cottages
• Barnview Cottage
• Ben Handford
• Benar Cottages
• Bodegroes Cottage
• Brecon Beacons Tourism
• Bryn Melyn Farm Cottages
• By the Wye Glamping
• Cae Coryn Cottages
• Cae Madog Barn
• Caerphilly County Borough Council
• Cambrian Cottages
• Canllefaes Cottages
• Carys Hutchings
• Castle Square Apartments Ltd and Llinos & Tyddyn Crwn Letting
• Castleview Cottages
• Cnewr Estate Ltd
• Coedmor Self-Catering Holiday Cottages
• Conwy County Borough Council
• Country Land and Business Association
• Cwm Irfon Lodge Cottage and Nant y Walch Barn
• Cylch yr LIaith
• Cyngor Gwynedd
• David Smith
• Denbighshire County Council
• Dioni Self-Catering Ltd
• Dr Phil Swan
• East Trewent Farm
• Elizabeth Daley
• Emma Ashby
• Emma Enticott, Oakland House
• Erw Wen Holiday Let
• Escape to Penllyn
• Exclusive Cottages Ltd
• Faircroft Rhosili
• Faraway Follies
• Farmers’ Union of Wales
• Federation of Small Businesses Wales
• Ffyllon Fawr Self-Catering Holiday Let
• Flintshire County Council
• Gadlys Coastal Cottages and Camping
• Gareth Owen
• Generation Rent
• Glan Llugwy Holiday Let
• Glascoed Farm Holiday Cottages
• Glynis Lloyd
• Golwg y Graig
• Gower Lettings Ltd
• Gray Thomas
• Great House Farm Luxury Pods and Self-Catering
• Great Lunnon Farm Cottages
• Guesthouse Aberdyfi
• Gwelfor
• Gwyliau Garth
• Gwyliau Talwrn Bach Holidays
• Gwyndaf Pritchard Lettings
• Haulwen Lewis
• Hausman Hughes Ltd
• Hengoed Farm Holidays
• Hill View Holiday Homes
• Holiday Property Management (Conwy) Ltd
• J & E Hawkins Partnership
• J.A.P. Meulendijk
• James Dale
• Joanne Bacon
• Karen Anfield
• KILEX Serviced Accommodation Ltd
• Kilsby House & Cottage
• Kimley Moor Farm
• Llainfran Holidays
• Llandetty Hall Farm Holiday Accommodation
• Llandudno Hospitality Association
• Llanfair Caereinion Town Council
• Llety Holiday Cottage
• Llety Self-Catering Cottage
• Lleyn Properties Ltd
• Lucy Clare Whitehead
• M and G Lloyd
• Mark Bagley
• Maureen Dale
• Mega Tyres Ltd
• Mid Wales Tourism
• Mill Haven Place
• Monmouthshire County Council
• Nant Helyg Services Ltd
• Nant Lladron Ltd
• Nant y Walch Barn, Events and Wedding Venue
• National Farmers’ Union Cymru
• National Trust Cymru
• Neath Port Talbot County Borough Council
• Newport City Council
• Ochr Y Rhiw Holiday Cottage
• Pantycastell Cottages
• Park Hall
• Pasture Farm
• Paul Featherstone
• Pembrokeshire County Council
• Pentrecelyn Barn
• Penwern Fach Holiday Cottages
• Penwernfach Holiday Cottages
• Performance Related Ltd
• Plas Pantyderi Manor
• Propertymark
• Ralph Bacon
• Ray and Lorraine Thomas, Sutton Barns
• Rebecca Barlow
• Red Kite Cottages
• Rejuvenate Estate Cyf
• Roger Moss
• Salt & City Stays
• Seiont Gwyrfai and Llyfni Angler’s Association
• Serekinti Ltd
• Short Term Accommodation Association
• South Wales Homes
• St Brides View
• Stallion Valley Holiday Cottages
• Strada Care Ltd
• Supported Coastal Cottages
• Sykes Holiday Cottages
• The Coach House, Millmoor Cottages
• The Forest B&B and Cottages
• The Institute of Revenues, Rating & Valuation
• The Living Energy
• The Professional Association of Self-Caterers UK Cymru
• Top Floor at Cantref House
• Torfaen County Borough Council
• Tourism Swansea Bay Trade Association
• Travel Chapter
• Ty’n y Gwynt Self-Catering Apartments
• Tygylfinir Holiday Cottage
• Tynwald
• Velvet and Jasmine Cottage
• Visit Pembrokeshire
• Welsh Local Government Association
• Williams Rural Commercial Charted Surveyors & Valuers
• Woody’s Glamping
• Wren Farm Caravan Park and Holiday Cottages
• Y Faner
• Ynyswen Cottages

1,070 respondents did not state their identity or wished to remain anonymous.