The Welsh Government has launched a 12-week consultation into changes to holiday let tax rules, including a review of the controversial 182-day letting threshold.

Self-catering properties may be subject to non-domestic rates rather than council tax, but only if they meet certain letting criteria.

Since April 2023, this has required that a property is available to let for at least 252 days and actually let for at least 182 days in the previous year.

The Welsh Government said the consultation would examine the impact a “modest reduction” in the 182-day threshold could have, while also seeking views on five proposed exemptions.

The exemptions could apply to properties which cannot reasonably be used as permanent homes, including those forming part of a wider tourism business, large multi-unit properties, properties with planning restrictions, holiday lets within the grounds of an owner’s home, and accommodation on farms.

Finance Minister Elin Jones MS 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.”

The consultation is set to run until October 23.

But opposition parties have criticised the announcement, arguing that businesses need action rather than another review.

Reform UK Wales said more detail was needed on what a “modest reduction” in the threshold would mean in practice.

Louise Emery MS, the party’s shadow minister for culture, tourism and hospitality, said: “The tourism sector in Wales needs to know what a ‘modest reduction’ means in practice, and will it be enough to support the industry to remain competitive.”

She also questioned why the changes were not announced in the Senedd to allow greater scrutiny.

The Welsh Conservatives also criticised the timing of the consultation, claiming businesses were facing uncertainty during the peak summer season.

Paul Davies MS, the party’s shadow minister for the Welsh language, culture, tourism and sport, said: “Almost 100 days into office and Plaid Cymru’s answer is yet another review.

“Tourism businesses needed ministers to get on with fixing this damaging policy before the summer season, not launch a consultation when holiday lets and visitor attractions are already at their busiest.

"The 182-day rule has been causing problems for years. Businesses, representative organisations and opposition parties have repeatedly warned ministers about the damage it is doing to the tourism economy. Nobody needs another three months to discover there is a problem.”

He said the party would continue to argue for a reduction of the threshold to 105 days.

The Welsh Government’s consultation can be found at: www.gov.wales/classification-self-catering-properties-local-tax-purposes