Holiday Let Regulations in Wales

Holiday let regulations in Wales are being developed by the Welsh Government, because they believe properties are increasingly being bought for the purpose of owning a second home for private use or to set up a holiday let business.

Let’s take a closer look at these new rules for holiday lets in Wales and what they could mean for people looking to let out properties as holiday lets in Wales.

When you list your property with us, you have access to our exclusive owner app which contains further useful information, including our FAQs about Welsh holiday let regulations.

Changes to Business Rates and Council Tax Premiums for Holiday Lets in Wales

What is the difference between Business Rates and Council Tax?

Business rates and council tax are alike in the way that they are used to fund local services, but they differ when it comes to the purpose of the property. When being used for commercial purposes, business rates are applied instead of council tax. In order to qualify for business rates, a property that is being run as holiday let business must be occupied for a certain number of days within a 12 month period.

Business Rates for holiday lets in Wales

The Welsh Government has changed the criteria for a holiday let property to qualify for business rates: from April 2023 a property has needed to be made available for 252 days a year and occupied by guests on a commercial basis for 182 days a year in order to be eligible for business rates.

These Welsh holiday let rules mean that if a property does not reach this criteria, then the property owner must pay council tax.

Council Tax for holiday Lets in Wales

The Welsh Government made it possible for local councils to charge higher premiums (up to 300% which is 4x) of council tax on second homes and holiday lets in their areas from 1st April 2023. Local councils are able to choose the council tax premium that they feel is appropriate for their area.  

If a property is set up as a holiday let business but does not reach the required 182-day or 252-day thresholds above, then they will be charged council tax instead of business rates, as well as any council tax premium the local council has introduced. However, as of the 2024-5 financial year only one local authority in Wales had introduced a premium for second homes as high as 200% (Pembrokeshire) and some haven’t introduced one at all. Note that a council tax premium cannot be applied to a second home for which a planning condition;

• prevents occupancy for a continuous period of at least 28 days in any 1 year period;

• specifies property's use as a short-term let (STL) only;

• prevents occupancy as a person's sole or main residence

Ministers for the Welsh government say that these decisions have been taken as a way of ensuring that second homeowners make a fair contribution to local communities. You can read more about the changes being made to holiday let regulations in Wales here.

If you are unsure about any of the changes and how they apply to you, you should contact your local council. You can also read our full guides on furnished holiday let tax, council tax and business rates and legal requirements for letting a holiday property.

Registration and licensing schemes for holiday lets in Wales

Having consulted on the matter in Spring 2023, the Welsh Government announced in January 2024 that it will introduce a registration scheme with legislation to be introduced in late 2024. It is unlikely to be in place before mid-2025 at the earliest. It is expected to be set nationally, simple to use, cost effective and enable automatic/instant approval of properties.

Once the registration scheme has been set up, the Welsh Government intend on introducing a licensing scheme and then some form of quality standards. It is not yet clear what those standards would comprise.

There is no indication that the fundamental requirements to holiday let in Wales, such as health and safety, are going to change; simply that you would register (providing basic details about the property and owner) and then if a licensing scheme is introduced, apply for a licence.

Planning Permission for holiday lets in Wales

Planning permission for holiday lets can be the deciding factor on whether a holiday let business can go ahead. Planning laws differ across the United Kingdom, and further differences have been introduced in Wales.

Because second homes and holiday lets aren't defined under current planning laws, the Welsh Government have introduced three new classes for planning use under Welsh holiday let rules:

• a primary home

• a secondary home

• short-term holiday accommodation

Local planning authorities are able to make alterations to the planning system by requiring planning permission to change from one class to another (To do this, they will need to introduce what's called an "Article 4 direction"), but they will have to provide evidence of a need to do so.

Only one council, Gwynedd, have done so. Their Article 4 direction (covering the whole of Gwynedd except Eryri) came into effect on 1 September 2024. The Direction only applies to changes to a second home or holiday let after that date. So, properties already operating as a holiday let at that time would not be affected by this.

For more information, Gwynedd Council have published an FAQs page on their website.

You can also speak to your local council about changes to holiday let regulations in Wales if you have any concerns.

Disclaimer

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