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
Historically, holiday lets in Wales could qualify for business rates rather than council tax if they met certain conditions. However, to reduce the number of properties moving from council tax to business rates (and receiving small business rate relief), the Welsh Government raised the thresholds from 1 April 2023.
Updated Letting Thresholds
To qualify for business rates, a property must:
- Be available to let for at least 252 days in the previous 12 months (up from 140), and
- Be actually let for a minimum of 182 days (up from 70).
These thresholds are assessed on a rolling 12-month basis by the Valuation Office Agency (VOA).
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.
For example, Gwynedd Council and Anglesey Council both apply premiums on properties that don’t qualify for business rates — meaning some owners could face double, or even higher, standard council tax rates.
(This information is correct as of October 2025 — 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 2025.
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: Currently lower premiums; reviewing potential increases.
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 Gwynedd
Gwynedd Council has introduced Article 4 Directions as of 1 September 2024 to regulate the use of dwelling-houses as second homes or short-term holiday lets.
What this means
The Article 4 Direction removes permitted development rights in the Gwynedd Local Planning Authority area (outside Eryri National Park). This means that from the date it came into force, planning permission is required for changes of use between the new use classes:
- Class C3 — main or sole residence (primary home)
- Class C5 — second home (non-main residence.
- Class C6 — short-term holiday let.
Specifically, the following changes now need planning consent:
- Converting a main home (C3) into a second home (C5) or short-term holiday let (C6) or certain mixed uses.
- Changing a second home into a short-term holiday let, or vice versa.
The policy does not apply retroactively: properties already used as second homes or holiday lets before 1 September 2024 are not required to apply for retrospective permission merely for continuing that use.
ℹ️ Status & legal challenge
After its introduction, a High Court judgment found in favour of a claim against the Article 4 Direction, but Gwynedd Council is appealing the decision. In the meantime, the Article 4 Direction remains in force.
What buyers & investors need to know
- If you are considering purchasing a property in Gwynedd outside Eryri National Park, check whether it is already in one of the affected use-classes. If it is, you may avoid needing planning permission for continuing that use.
- If you plan to convert a main residence into a second home or holiday let after 1 September 2024, you must apply for planning permission due to the Article 4 Direction.
- Mixed uses (e.g. part holiday let, part main residence) are also subject to this requirement.
Head to Gwynedd Council’s website for more information about Article 4.
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.
