Welsh Holiday Let Owner Faces £17,000 Tax Shock After 1 Rule Change

Laura Tenison, who runs Wern-y-Cwm Farm — a beautiful holiday retreat in Wales — was left stunned after being hit with an enormous £17,000 council tax bill, all due to a single rule change. The property, which can sleep up to 46 guests, was caught out when the Welsh government tightened the rules for holiday homes in April 2023.

Under the new law, holiday homes must now be available to let for at least 252 days a year (up from the previous 140) and actually occupied for at least 182 days (up from 70) in order to qualify for business rates rather than council tax. Since Wern-y-Cwm Farm couldn’t meet these higher thresholds at the time the changes came in, it was reclassified as a second home and subject to a steep council tax bill.

Laura explained: “We dip in and out, which means that one year we’ll be in business rates, and the next year we’re back in council tax. So it’s a bit of a mess. But that rule has, in effect, become a sales tax. The year we came out of business rates and back into council tax, we were hit with a £17,000 bill.”

Running such a large and historic property comes with its own challenges. Laura pointed out that it often takes several days to prepare the retreat after guests leave, and routine repairs and maintenance to the historic farm can take up to six weeks each year.

“We border on that 182 nights,” she added. “We do it by marketing very hard, being really on top of it, and running it as a full-time business — unlike many in Welsh hospitality who do it as an add-on to their farming business.”

The Welsh government introduced these stricter rules to tackle the growing problem of housing affordability and to ensure that holiday lets genuinely benefit the local economy by being actively rented out. Some councils, such as in Gwynedd, have even imposed additional premiums on second homes, further increasing the financial burden for owners who don’t meet the thresholds.

While the changes are intended to make housing more accessible and to support local communities, owners like Laura now face tougher requirements and significant financial consequences if they fail to meet the occupancy rules.