Proposed changes to Self-Catering NDBR Tax Rules In Wales

3/3/2022

The Welsh Government has announced potential new measures to address the issue of second home owners pricing locals out of the housing market in popular tourism destinations.

The first measure is to allow local councils to set council tax premiums of up to 300% on second homes and long-term empty properties from April 2023 (the current allowed premium is 100%). Individual councils will be allowed to determine whether they apply a premium, the level of the premium (up to the 300% maximum) and whether different premiums should be set for second homes and vacant homes.

The second measure, which is more important for the tourism industry is the announcement that the criteria for self-catering accommodation being eligible for business rates instead of council tax will also change from next April. The current requirement is for properties to be available to let for at least 140 days a year and let for at least 70 days a year in order to be eligible for business rates. From next April this will increase significantly to having to be available to rent for at least 252 days and actually let for at least 182 days in any 12-month period.

The Wales Tourism Alliance is extremely concerned about this proposed second measure and will be responding to the consultation. These proposals will be significantly greater than the requirement for self-catering operators in England (available for 140 days a rented for 70 days a year the current Wales level) and there are concerns that many self-catering businesses will be able to achieve these new thresholds.

https://gov.wales/new-tax-rules-second-homes

4 Comments

Wendy Lander

4/3/2022 09:11:07 am

We run a self catering holiday cottage adjacent to our home in Flintshire. Over the last 6 years we have achieved the proposed levels for 3 of the 6 years. With tourist attractions closing from mid Sep to Easter it isn’t easy to attract guests out of season and most breaks during this period are 2/3 nights only. With rising fuel costs it’s going up be harder to discount to attract guests. The new required levels are far too high and will penalise genuine businesses who aren’t in honeypot locations.

Jason Jones

6/3/2022 09:29:46 am

The increase in the number of days a property must be let to qualify for non domestic rates from 70 to 182 days in each year feels extreme. 182 days is not obtainable for many holiday let businesses in Wales. Fundamentally, the tourist season in coastal areas is quite short, running from Easter to October half term. If a property is
available and rented out for the Easter and Summer holidays and the May and October half terms that would result in 70 days occupancy. Outside of the school holidays many guests choose to book weekend breaks of 3 days rather than 7. These 3 day bookings obviously reduce occupancy rates.

If holiday let businesses close as a result of these proposals, as seems extremely likely, there will surely be less accommodation available, guests will choose alternative destinations such as the Lake District, Devon or Cornwall and the Welsh tourism industry will suffer.

Jacqueline Janssen link

27/3/2022 04:11:58 pm

Self-catering is the only sector as far as I know that has a ‘performance requirement’ to qualify for business rates. By setting (for most Welsh small SC businesses) unattainable thresholds, the sector is exclusively punished for factors beyond their control, such as recessions, fuel prices, contagious diseases, cheap international holiday destinations, and other going ons in the wider world. And then we haven’t even talked about councils giving off endless permissions to convert buildings into holiday cottages, or allowing residential dwellings to be used for short holiday lets, thus influencing the supply-demand ratio to a great extent.
The VOA uses non-discretionary criteria and cannot and will not take mitigating circumstances into account. Think what would have happened to us in the last two years, if the 182 days had been in place …. There would be very few SC businesses still operating. It is extremely galling that the sector seems to be equated with second home owners and having been described by welsh ministers as ‘needing to show that they contribute sufficiently to the local community’. I do not think many politicians in Cardiff appreciate the work & effort that goes into running the 9 cottages we have, and the money spent in the community to keep the place up to the level guests nowadays expect; by employing local staff, using local tradesmen, buying local wares, using local services, etcetera. Although we are open all year, the reality is that the period between November and March/April brings only very few guests to our door. Therefore you have to be nearly a 100% occupied in the remaining months to be able to reach the 182 days threshold, year after year. And who wants to run a business with such an uncertain tax position? I certainly would not any longer.

Jayne Rowley link

29/4/2022 10:11:33 pm

I own two converted barns which are genuine holiday lets, open all year and not used by friends and family. The 182 day rule will be very hard to achieve for me. This will ruin a lot of businesses including the letting agencies

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Proposed changes to Self-Catering NDBR Tax Rules In Wales

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