Pembrokeshire Council Urges Welsh Government Review of 182-Day Rule for Self-Catering Businesses

Pembrokeshire’s council has called on the Welsh Government to review the contentious 182-day rule for self-catering businesses.
At the October 5 meeting of Pembrokeshire County Council’s Cabinet, members were asked to approve a response to the Welsh Government’s consultation on the current 182-day rule for self-catering properties to avoid paying the second homes council tax.
It means properties must be let for at least 182 days in the previous year and have been available for occupancy for 252 days.
Self-catering businesses that fail to meet the 182-day threshold end up paying the second homes council tax premium instead of non-domestic business rates.
In Pembrokeshire, the council tax premium is 125 per cent on top of the standard rate, with similar premiums added to the police precept and town or community council bill.
In 2023, the Welsh Government increased the threshold from 70 days for properties to qualify for business rates instead of paying the second-home premium.
Pembrokeshire County Council has previously urged the Welsh Government to reduce the 182-day threshold.
The Welsh Government is consulting on the classification of self-catering properties for local tax purposes, including whether to reduce the 182-day level and extend exemptions.
A report by finance cabinet member, Cllr Jon Harvey, said the 182-day issue “has been raised as part of successive council tax premium consultations and it is of concern to many self-catering accommodation and holiday let owners”.
Cutting the threshold could hit Pembrokeshire’s finances by shrinking the council tax base and reducing council tax and premium income.
In its response, the council said the jump from 70 days to 182 days “was too steep an increase,” adding: “It was also implemented after the peak in homes converting to second homes/holiday homes so was shutting the door after the horse had bolted.”
The council added: “The jump to 182 created instability in a part of our tourism industry (and the part that tends to be higher value and more likely to work in off-peak season.”
The council said the Welsh Local Government Association’s Rural Manifesto call for a 145-day threshold “may be a little too low”, but supports a reduction to 154 days, adding: “We agree that a reduction of more than four weeks per year (resulting in a letting threshold of 154 days), for example, could risk substantially undermining the aim of maintaining the policy balance between supporting legitimate holiday-let businesses and preventing the loss of housing stock through excessive numbers of lightly let self-catering properties, and would support a reduction to this level.”
The council also reported delays by the Valuation Office, leaving businesses that missed the 182-day threshold facing large backdated bills.
Cabinet members unanimously backed the response at the October meeting.
In July, Councillor Huw Murphy called for the threshold to be reduced to 140 days and asked the council leader to seek a timetable for a Welsh Government review. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

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