CLA Cymru has been supporting a campaign led by the Professional Association of Self Caterers (PASC) aimed at getting Welsh Government to review the 182 days policy.
The 182 days policy means that holiday let properties must be let for at least 182 days a year in order to qualify for business rates. Those that do not meet this threshold will need to pay the ‘Second Home Premium’ council tax rate. We know that many tourism businesses will be unable to hit the threshold, and therefore will be required to pay the Premium.
As part of the Review 182 campaign, PASC organised a survey, which has now been completed by more than 1500 people, 49.33% of whom hit the 182 days let last year. However, 70% of the respondents had to discount their prices in order to achieve their bookings, which makes running a viable business even more challenging.
Even more concerningly, only 25% of respondents anticipate hitting the 182 days next year.
If the rule is not reviewed, we expect that the policy will have a devastating impact on the tourism sector, which is crucial to the economy of rural Wales. 42% of the PASC survey respondents are considering putting their properties on the market as a result of the policy. If, as forecasted, only 25% of respondents meet the threshold next year, more people may consider selling up and leaving the sector.
Currently, the only exemption that exists is for properties where the planning permission means that they can only be used for holiday lettings. The CLA has been lobbying for more exemptions to be put in place to ensure that the policy does not drive businesses out of the sector.
The results of the survey showed that the exemptions that would be most beneficial would be for properties that have been trading as furnished holiday lets for four years or more, and for annexes or buildings in grounds of main property. There was support for a whole range of exemptions, which would help to reduce the impact of the policy on tourism businesses.
The CLA will continue to support the Review 182 campaign, and to lobby Welsh Government for change. In December 2022, we wrote to the Finance Minister to bring her attention to the damage that this policy will cause.
If you have any questions about the 182 day rule or how it affects you and your business, please get in touch with the CLA Cymru team who will be happy to help.