New regulations implemented by the Welsh government aimed at balancing tourism with community needs are resulting in substantial, backdated council tax bills for holiday let owners. The changes, introduced to curb the impact of second-home ownership and ensure properties are genuinely available for rent, stipulate that holiday lets must be rented out for a minimum of 182 days and available to let for 252 days in a 12-month period to qualify for business rates instead of council tax. Properties not meeting these criteria are subject to council tax charges, often with a premium.
Owners who have historically operated their properties as holiday lets without previously paying council tax are now facing unexpected bills. Clive Mortlock, who has operated two holiday cottages since 2002, received a council tax bill of £27,000, backdated to 2023, which included a 100% second home premium. He stated that this bill could wipe out his profits from the past three years and risks the collapse of his business due to what he described as unrealistic legislation.
Another owner, Gyles Palmer, who has been in the holiday let business for 20 years, was issued a £15,000 council tax bill. He noted that he rarely exceeded 150 nights of booking per property annually and finds the 182-day requirement difficult to achieve, especially given his annual profit of around £10,000.
Nicky Williamson of the Professional Association of Self-Caterers (PASC) reported that the organization is assisting numerous individuals with backdated bills, with the highest encountered being £60,000. In response to the new rules, some owners are reportedly reducing their rental prices in an effort to meet the occupancy thresholds.
Local authorities are enforcing the 182-day rule as directed by the government. Powys council acknowledged concerns and indicated plans to offer discounts to struggling holiday lets. Carmarthenshire council stated it is adhering to instructions from the Valuation Office Agency and will support those finding the rules challenging.
A Welsh Government spokesperson commented that the 182-day threshold will be kept under review, and clear exemptions will be created for accommodation that would not typically qualify as a private home. The government expressed commitment to balancing the needs of the tourism sector with the preservation of local communities.
The number of holiday homes in Wales saw a significant increase between 2020 and 2023, with areas like Gwynedd, Anglesey, and Conwy experiencing notable rises. However, PASC has observed a 26% decrease in short-term rentals since the new regulations took effect between 2024 and 2025.