The Welsh Government has launched a consultation on changes to the tax rules for holiday lets.

The proposals would give self-catering properties more flexibility under the 182-day occupancy threshold introduced in April 2023.

Under current rules, self-catering properties must be available for at least 252 days a year and actually let for 182 days to remain classed as non-domestic and pay business rates. Properties that fall short are reclassified as domestic, potentially triggering council tax bills and any local second-home premium.

The consultation proposes two main changes:

• 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 2 or 3 previous years.

• 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. Monmouthshire County Council has already introduced this approach locally.

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."

James Evans, Conservative MS for Brecon and Radnorshire, welcomed the proposed changes but said the original 182-day threshold is “far too high.”

He pledged that, if his party comes to power in 2026, he would introduce a lower threshold of 105 days and scrap what he described as the “disastrous” planned tourism tax.

“I welcome these proposed changes to the holiday let occupancy rules and they will give more flexibility into the system and the proposed 12-month grace period. However, these are only minor tweaks to a policy that is deeply flawed. The occupancy threshold of 182 days is set far too high and this Welsh Labour policy has created a divide between us and England yet again," said Mr Evans.

The consultation is open until 20 November 2025, and members of the public, business owners, and industry groups are encouraged to submit their views.

You can submit your comments by either online form, email or post.