Welsh government's holiday let tax changes 'disaster' for Wales

The number of days holiday lets must be filled has more than doubled after the rules changed

More than doubling the days holiday lets must be filled has been "a disaster" for landlords, it has been claimed.

Previously, they had to be occupied for 70 days a year to qualify for business rates, that rose to 182 this month.

The Professional Association of Self-Caterers (PASC) said this target was "almost impossible", leaving owners at risk of 300% council tax premiums.

The Welsh government said it wanted to "develop a fairer housing market".

PASC Wales policy advocate Adrian Greason-Walker, said: "The 182-day rule in Wales has been a disaster for Welsh self-catering.

"It may be easy to hit 182 days in hot spots along the coast, but inland, and particularly in rural Wales it is almost impossible."

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Things were made worse by the cost-of-living crisis, he added, saying that the proposal to change the figure to 105 days received the "vast majority" of support.

A PASC survey found 64% of landlords who responded, a total of 323 owners in Wales, achieved 182 days of occupancy between April 2022 and March 2023.

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Ian Carrington, who lives in Shrewsbury, has two holiday lets in Llangollen, Denbighshire.

The 64-year-old said the prospect of trying to fill them for 182 days a year was worrying and could make his business unviable.

He said: "If we went back on council tax, I think we'll be running at a loss, and it becomes a waste of time."

During the pandemic Mr Carrington said he was charged £19,000 for council tax but was unable to reach the 70-day threshold due to lockdown and appealed against the decision.

While he said he understood the Welsh government had to address housing shortages, he believed the new rules would hit tourism.

He said: "It's put me off [and] I love my job. I love doing the business, but if I started now, I wouldn't do it."

He dubbed the new rules "a clumsy tool" to solve Wales' housing problem

Gwion Llwyd, who looks after hundreds of properties for owners in Wales, said it this was a "clumsy tool" to tackle the housing shortage.

"I have owners with holiday lets in Abersoch and Nefyn, two places where this housing problem is at its worst. They are going to hit this new target very easily.

"But if the people in Bala, for example, drop out of the market because they can't reach it, the people in Abersoch are probably just going to raise their prices.

"The demand will still be there but the stock will be lower."

The Welsh government said the changes were designed to ensure owners made a fair contribution to communities and to show whether properties were being let regularly.

Whether council tax premiums were applied was a decision for councils, it added.