Written question WQ99834

The HMRC Valuation Office, which is independent of the Welsh Government, is responsible for classifying self-catering properties for local tax purposes, based on the criteria prescribed in legislation. The HMRC Transformation Roadmap includes targets for faster Valuation Office decisions on the classification of self-catering properties.

There are established statutory procedures for an owner to challenge the inclusion of their property in a council tax list or its omission from a non-domestic rating list, if they believe the property has not been classified correctly. The Valuation Office is required to take a decision in response to a challenge by the relevant statutory deadline. If the property owner believes the decision on their challenge is not correct, they may appeal to the Valuation Tribunal for Wales.

The Service Level Agreement between the Welsh Government and the Valuation Office includes a requirement to check the assessments of all self-catering properties listed for non-domestic rates at least once every two years. This is intended to ensure the non-domestic rating and council tax lists are updated regularly and support local authorities to collect the correct amount of tax. The Valuation Office is responsible for updating the lists when property classifications change and communicating directly with local authorities.

To support businesses, the Welsh Government is giving priority consideration to the delivery of our manifesto commitment to keep the 182-day letting threshold under review and create clear and reasonable new exemptions where self-catering accommodation would not qualify as a private home. In the meantime, some refinements to the application of the letting criteria confirmed by the previous Welsh Government took effect on 1 April 2026. Where properties are listed for council tax, there are a range of statutory exceptions from a premium which may apply. From 1 April 2027, eligible properties transferring from non-domestic rates to council tax will, under the new Class 8 exception, be liable only for the standard rate of council tax for 12 months and will not be subject to a premium during that period. In addition, Welsh Government guidance describes the broad discretion of individual local authorities in relation to council tax liability and premiums, which allows for tailoring of the local tax system to reflect local circumstances.

The Regulatory Impact Assessment for the increased letting criteria was published alongside the associated legislation in May 2022. Any further legislative changes, including in relation to our manifesto commitment, will be the subject of a corresponding Regulatory Impact Assessment.