Short-term holiday lets non-domestic rates

Are proposed changes to the thresholds that short-term holiday let businesses must meet to be eligible for non-domestic rates (NDRs) sufficiently clear?

The Welsh Government consulted in 2021 on the principle of amending the threshold for NDRs and subsequently announced its intention to raise the eligibility criteria. From 1 April 2023, short-term holiday let property will need to be available to let for 252 days (up from 140 days under the previous threshold) and actually let for 182 days (up from 70 days). This means that only genuine short-term holiday let businesses will be eligible for NDRs, whilst property failing to meet these thresholds will remain liable for council tax at the appropriate rate. 

The consultation sought views on whether the proposed amendments to the Local Government Finance Act 1988 are legible, and whether there are any other practical issues that need to be addressed. Propertymark has expressed the view that the Draft Order is unambiguous but we have reiterated our call for the Welsh Government to review the Small Business Rates Relief (SBRR). 

Presently, qualifying businesses with a rateable value of up to £6,000 are eligible for one hundred per cent relief from NDRs, with relief applied on a tapered basis thereafter up to a rateable value of £12,000. We feel this provides an incentive for investment in the short-term holiday let sector, and have suggested that short-term holiday let businesses might be exempt from SBRR to remove the risk of its exploitation and help to create a more level playing field between the short-term holiday let and long-term private rented sectors.