In recent years, the rise in holiday lets across Wales has led to a range of new rules and regulations for holiday lets, aiming to balance the growth in tourism with the needs of local communities.
Wales remains a beautiful and popular destination for visitors, and the government is keen to support sustainable tourism while tackling issues like housing affordability and community stability. If you own — or are considering buying — a holiday let in Wales, it’s essential to stay up to date with the latest legislation.
Here’s a breakdown of some of the new rules for holiday lets in Wales…
Business Rates vs Council Tax: The New Criteria
Since 1 April 2023, holiday lets in Wales that are genuinely run as commercial self-catering businesses must meet stricter criteria to be assessed for business rates rather than council tax. To qualify under the current rules, a property must:
- Be available to let commercially for at least 252 days in the previous 12 months;
- Be actually let commercially for at least 182 days in the same period;
- And the owner must intend to make it available for at least 252 days in the next 12 months.
These tests are assessed by the Valuation Office Agency (VOA). If a property doesn’t meet them, it will instead be liable for council tax, which in many areas includes second-home or under-used home premiums that can increase the bill significantly.
ℹ️ Looking Ahead
Following consultation, refinements to the letting criteria — such as averaging actual letting days over multiple years and counting up to 14 days donated to charity — will apply from 1 April 2026.
Financial Impact
If a property fails to meet these thresholds, it will instead be liable for council tax.
In some regions, this can lead to higher costs, particularly where councils apply council tax premiums on second homes or underused holiday lets.
(This information is correct as of February 2026 — check your local council’s website for current rates.)
💡 For a more comprehensive look head to our Guide to Furnished Holiday Let Tax and Business Rates in Wales.
Council Tax Premiums on Second Homes in Wales
In Wales, local councils can charge a Council Tax premium on second homes and furnished holiday lets that don’t meet the business-use criteria (for example, those that aren’t available to let for a sufficient number of days each year).
These premiums aim to reduce the number of properties left empty and help ease housing pressures in popular areas.
Each local authority sets its own rate, and the Welsh Government currently allows councils to charge up to 300% extra on top of the standard Council Tax rate.
Here’s how it currently stands across North Wales (as of October 2025):
- Anglesey: 100% premium — owners pay double the standard Council Tax.
- Gwynedd: 150% premium — owners pay 2.5× the standard rate.
- Conwy: 150% premium — currently in effect.
- Denbighshire: 150% premium — currently in effect.
- Flintshire:100% premium
Because each council sets its own policy, it’s always best to check the latest information directly with your local authority, or contact one of our team at Menai Holiday Cottages and we can point you in the right direction.
For continued reading we’d recommend heading to the Welsh Government’s article on How Tax Works for Second Homes.
Planning Changes: Article 4 Directions in North Wales
Gwynedd Council introduced an Article 4 Direction on 1 September 2024 to manage the use of dwellings as second homes or short‑term holiday lets outside the Eryri National Park boundary.
What this meant originally
The Article 4 Direction removed certain permitted development rights in the Gwynedd Local Planning Authority area, meaning planning permission was required for changes of use between the new planning use classes:
- Class C3 – main or sole residence (primary home)
- Class C5 – second home (non‑main residence)
- Class C6 – short‑term holiday accommodation (holiday let)
Under the Direction, planning permission was needed to:
- Convert a main residence (C3) into a second home (C5), a short‑term holiday let (C6), or certain mixed uses.
- Change a second home into a short‑term holiday let, or vice versa.
- Change between second home and holiday let uses.
The Article 4 Direction was not retrospective, so properties already in these use classes before 1 September 2024 didn’t need retrospective planning permission just to carry on the same use.
ℹ️ Status & legal challenge and updated status of Article 4 (as of February 2026)
Gwynedd Council’s Article 4 Direction, which would have required planning permission to convert homes into second homes or short-term holiday lets outside Eryri National Park, was quashed by the High Court in late 2025. An appeal attempt by the council was recently refused (February 2026), so the Direction is no longer in force.
This means that at present, buyers or investors in Gwynedd (outside Eryri) do not need planning permission for changes of use between main residences, second homes, or holiday lets. It’s still wise to check the property’s current use class and stay informed in case future local planning policies change.
However, the Article 4 Direction remains active within Eryri National Park, so planning permission is still required there for changes of use between main residences, second homes, and holiday lets.
What buyers & investors need to know
- If you’re considering buying a property in Gwynedd (outside Eryri National Park), check its current use class (C3, C5 or C6).
- At the moment, planning permission is not required to change between these use classes because the Article 4 Direction has been quashed.
- However, keep an eye on the outcome of the Council’s appeal — if the Direction is reinstated, planning permission could again be needed for certain changes of use.
For the absolute latest on Article 4 in Gwynedd, it’s best to head to Gwynedd Council’s website for more information or or speak with a planning professional.
Tips for Holiday Let Owners and Buyers
If you currently own or plan to invest in a holiday let in Wales, staying on top of these changing regulations is essential. Here are some practical steps to help navigate the new landscape:
- Meet Letting Requirements: Ensure your property meets the new letting thresholds to qualify for business rates. Working with a trusted holiday letting agency can help boost occupancy and meet the requirements.
- Check Planning Requirements: Before purchasing or converting a property, consult with the local council to understand any planning permissions or Article 4 Directions that may apply. Our blog Do You Need Planning Permission for a Holiday Let in North Wales? can guide you though this too.
- Stay Informed: Regulations are likely to continue evolving, so stay connected with local authorities, holiday lets agents like ourselves to keep up with the latest developments.
Thinking of buying a holiday let? Head to our blog all about the Costs of Owning and Running a Holiday Let, to ensure that you’re making an informed decision.
The new holiday letting rules in Wales reflect a growing trend across the UK, aiming to balance tourism growth with local housing needs. While they may increase costs or add administrative requirements, these changes also present an opportunity for property owners to contribute positively to Welsh communities by keeping properties active and supporting sustainable tourism.
Investing in a holiday let in Wales can still be highly rewarding, but navigating these rules requires awareness and adaptability. Whether you’re an existing owner or a potential buyer, understanding these regulations is essential for a successful and compliant holiday let business in Wales.
Our Owner Blogs have plenty of guides to help you through the process of running a holiday let, from decorating your holiday home, to understanding holiday home insurance, Menai Holidays Cottages can help you.
For more information about letting your cottage with us, complete the form below to request contact from our team. You’ll also receive a copy of our FREE Owner Guide.
Note: The information contained in this article was accurate at the time of writing, based on our research. Rules, criteria and regulations change all the time, so please contact our prospective new owner team if you’d like to hear how. Nothing in this article constitutes the giving of financial, tax or legal advice to you; please consult your own professional advisor (accountant, lawyer etc). in this regard. If we have referred within the article to a third-party provider of unregulated holiday let mortgages, this is due to the fact that such mortgages aren’t currently regulated by the FCA.As a helpful reminder, your home may be repossessed if you do not keep up repayments on a mortgage, so again anything you decide to do in this particular area this is one on which you should take your own professional advice on too, as we aren’t providing and can’t provide you with this.
As a holiday letting owner you are responsible for compliance with health & safety laws, regulations and guidance, and for having suitable insurances in place (not Sykes Holiday Cottages or its brands). From time to time, Sykes shares information with you on the topic of health and safety and insurance. When it does so, it is not providing you with advice (legal, financial, tax or otherwise); please seek your own as you see fit. In addition, it is not making any representations or warranties about the information being complete or free from errors or inaccuracies. Sykes shall not be liable for any loss or damage arising under or in connection with your reliance on it.
