Many holiday let business may close as a result of new rules that have been introduced by the Welsh Government says Montgomeryshire MS Russell George.

A new survey from the Professional Association of Self-Caterers UK has indicated that as many as 75% of self-catering accommodation businesses in Wales are set to be hit by the Welsh Government’s 182-day letting rule and associated council tax premiums of up to 300% that business leaders have warned ‘could destroy’ the sector.

In a move designed to make more local housing accommodation available, the Welsh Government has implemented occupancy thresholds to at least 182 days per year for businesses letting properties. Failure to meet this threshold could see holiday-let business owners face a second homes Council Tax premium of up to 300%. A business currently paying £10,000 in rates could therefore face increased bills of up to £40,000.

Previously, Mid Wales Tourism Cymru (MWT Cymru), which represents more than 600 tourism and hospitality businesses across Powys, Ceredigion and Southern Snowdonia, had surveyed self-catering businesses across Wales to discover how they will be impacted by proposed taxation rules, which are linked to the ownership of second homes. MWT Cymru received 137 responses to its survey, with 66% of businesses saying they would be unable to meet the new rule of letting their properties for 182 days due to the short tourism season in Wales.

Several businesses said they would be forced to consider closing as they could not afford to pay 300% council tax if their local authority decides to impose that rule. Critics, including opposition politicians and accommodation providers say that this rule has the potential to disrupt the Welsh tourism sector on an unimaginable scale, with many furnished holidays lets operated as small businesses by families, with some being just annexes to their homes.

MS Russell George has previously called for the threshold to be reduced to 105 days and Welsh Conservatives have forced a vote in the Senedd calling on the Welsh Government to scrap the 182-day rule.

Commenting, Mr George said:

“Over the past 12 months, my inbox has been full of concerned small business owners regarding this legislation and the eye watering amount of money they could be forced to pay.

“In Powys, we are lucky to have many small self-catering businesses, but the Welsh Government is ignoring the views of the tourism industry and is pressing ahead with deeply harmful policies that will damage a sector that supports 1-in-7 jobs here in Wales.

“I would favour an achievable, industry-backed 105-day rule to reverse this policy and to help solve the concerns they were brought in, to address. There are over 22,000 empty homes in Wales compared with 11,300 self-catering holiday lets. My colleagues and I have long called for the Welsh Government to bring empty homes back into use, rather than raise tax for the hardworking people of Wales."