How self‑catering holiday properties are treated for Council Tax and Business Rates, and what you need to do to ensure your property is correctly assessed.
Business Rates or Council Tax: what applies?
In Wales, whether your holiday let is charged Business Rates (Non-Domestic Rates) or Council Tax (and possibly a second home premium) depends on how the property is used.
This decision is made by the Valuation Office Agency (VOA), not the Council.
When a property qualifies for Business Rates
To be treated as a business (and charged Business Rates), your property must be run as a genuine commercial holiday let.
From April 2026, all of the following must apply:
- The property must be available to let commercially for at least 252 days in a 12‑month period
- It must be actually let for at least 182 days
- You must intend to continue letting it commercially
If the criteria are not met
If your property does not meet these thresholds:
- It will be treated as a domestic property
- You will be liable for Council Tax instead of Business Rates
- In some cases, a Council Tax premium may apply
This can significantly increase the amount you pay.
Moving from Council Tax to Business Rates
If your property currently pays Council Tax but now meets the criteria:
- Apply to the Valuation Office Agency (VOA):
- The VOA will assess your property
- If eligible, they will:
- move the property into the Non-Domestic Rating List
- assign a rateable value
- The Council will then issue a Business Rates bill
You must apply - this is not automatic.
Ongoing checks
You may be asked to confirm your letting activity each year. If you stop meeting the criteria, your property may be moved back to Council Tax.
Key targets you must meet
To remain on Business Rates, you must consistently demonstrate:
- 252 days availability per year
- 182 days actual letting per year
These figures are based on:
- your actual bookings
- your availability for commercial letting
Recent and upcoming changes (Wales)
The Welsh Government has introduced and is continuing to refine these rules.
Changes from April 2026
New flexibility has been introduced:
- Averaging rule:
- You can meet the 182-day requirement using an average over 2 or 3 years, rather than one year alone
- Charitable use:
- Up to 14 days per year donated to a registered charity can count towards your total
These changes help businesses with fluctuating occupancy.
Important information
- You must keep accurate records of:
- You must tell the VOA and Council about significant changes
- The council cannot override the VOA decision
What this means in practice
If you meet the criteria:
- You will pay Business Rates
- You may qualify for Small Business Rates Relief
If you do not:
- You will pay Council Tax
- You may be charged a premium (up to 300%) in some areas
Related links