FSB Wales is calling on the Welsh Government to reduce the 182-day letting threshold used to decide whether self-catering properties are treated as businesses for tax purposes.
The call comes in the organisation’s response to the Welsh Government’s consultation on the classification of self-catering properties for local tax purposes, which closed on 23 October 2026.
Small operators that fall short of the threshold can be moved from non-domestic rates to council tax. FSB Wales says difficult trading conditions, seasonal demand, maintenance requirements or a temporary downturn can therefore change how an otherwise genuine business is classified.
It wants ministers to replace the current cliff-edge test with a lower, more proportionate threshold that recognises genuine commercial activity, while keeping safeguards against second homes being artificially classified as businesses.
Mike Learmond, FSB Wales Senior Development Manager, said: “Our members have been clear that the 182-day threshold can create a damaging cliff edge for viable self-catering businesses. A difficult season or temporary disruption should not determine whether a genuine operator is treated as a business.”
“Housing pressures must be addressed, but not at the expense of legitimate small businesses that sustain jobs, contribute to rural diversification and support local visitor economies. We are calling on the Welsh Government to introduce a fairer, more proportionate system that protects genuine operators.”
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