Holiday let owners in Wales may find relief from allegedly harsh tax regulations.

In an effort to alleviate a local housing crisis and gain control over the holiday let sector, the Welsh government has proposed new rules to support self-catering holiday rental owners in Wales. The changes, announced by Cabinet Secretary for Finance and Welsh Language, Mark Drakeford, aim to provide more flexibility for property owners while ensuring a balance between communities, businesses, landscapes, and visitors in Wales.

Drakeford emphasizes the need for everyone to make a fair contribution towards local economies and funding public services. He acknowledges the important contribution of tourism to the Welsh economy and the government's close collaboration with tourism and hospitality businesses to help address their challenges.

Under the current Welsh rules, rental properties not available for 252 days per year and not rented for at least 182 days are considered second homes and must pay taxes meant for such properties. However, the new proposals aim to ease these tax burdens. Up to 14 days of free holidays donated to charity can count towards the 182-day rental target in the new rules for holiday rentals in Wales.

The consultation on the proposed changes is open to public responses until 20 November 2025. One of the key changes proposed is a "12-month grace period" for property owners in Wales before they may have to pay higher council tax rates when they move from non-domestic to domestic classification. This grace period is intended to provide more flexibility for property owners.

However, the rule change has received criticism, with rental property owners abandoning their businesses due to the new tax burdens. Some owners have been faced with tens of thousands of pounds in backdated tax bills. Drakeford, however, asserts that 60% of properties in Wales are already meeting the new rules brought in from 2023.

The 182-day rental minimum in the new rules for holiday rentals in Wales can be reached over several years if needed. This provision is designed to offer relief to property owners who may not be able to meet the requirement immediately.

The proposed changes in Wales contrast with those in England, where the previous thresholds for qualifying for lower business tax rates for holiday rentals remain at 70 nights rented out of 140 available per year.

The Welsh government continues to work closely with tourism and hospitality businesses to help address their challenges and realize the potential of tourism while ensuring a fair contribution from all sectors towards the local economy and public services.

Holiday let owners in Wales may find relief from allegedly harsh tax regulations.