Council tax or business rates on a holiday let?

The test in England

Since 1 April 2023, a self-catering property in England is assessed for business rates instead of council tax only if it:

1. was available to let commercially, as short stays, for at least 140 nights in the previous 12 months;
2. was actually let for at least 70 nights in that period; and
3. will be available for at least 140 nights in the next 12 months.

The lets must be commercial, made with a view to profit, and each stay must be 28 nights or fewer. Nights when the home is closed for repairs, used by you, or let cheaply to family or friends do not count. A home that does not meet the test pays council tax instead.

How to apply in England

The Valuation Office Agency decides whether a holiday let goes on the business rates list. You apply with its form, “Apply for business rates for a self-catering property (England)”, sent by email or post. The form was updated on 1 April 2026 for the new revaluation.

Keep evidence of how the home is advertised and let, such as listings, booking records and accounts. The government has said owners must be able to provide it, and the agency sends information requests to self-catering properties.

Small business rate relief

If you own more than one let. Each let is valued separately, so a second home affects the first one’s relief. You keep relief on the first property for 12 months if you took on the second before 27 November 2025, or 36 months if on or after that date. After that, you keep it only if none of your other properties has a rateable value above £2,899 and all of them together come to less than £20,000, or £28,000 in London.

Rates from April 2026. New valuations and multipliers took effect on 1 April 2026. Self-catering accommodation in England qualifies for the lower retail, hospitality and leisure multipliers, below a rateable value of £500,000: 38.2p in the pound for smaller properties and 43.0p for larger ones. Businesses that lose relief because of the revaluation may get supporting small business relief.

If council tax applies: second homes premiums

A furnished home that is nobody’s main residence counts as a second home for council tax. Since 1 April 2025, councils in England can charge a premium of up to 100% on second homes, doubling the bill. Each council decides for itself, and must make its first decision at least a year before the premium starts.

There are exceptions, including homes actively marketed for sale or for let (for up to 12 months), job-related homes, annexes, and homes whose planning conditions prevent year-round living or limit them to holiday use. The guidance does not say that marketing a home as a short let counts as marketing it for let, so do not rely on that exception.

We list the second homes premium for every council where we run homes, checked on each council’s own website, on our areas and rules page.

Wales

In Wales, a self-catering property pays business rates if it was available for at least 252 nights and actually let for at least 182 nights in the previous 12 months, and will be available for 252 nights in the next 12. From 1 April 2026:

• if a home falls short of 182 nights, lets can be averaged over the previous two or three years;
• up to 14 nights a year given free to registered charities count towards the test;
• lets can be averaged across several properties at the same location.

The Welsh Government is consulting, until 23 October 2026, on changes to the 182-night test and some exemptions from 1 April 2027. These are proposals, not law.

Homes that do not qualify pay council tax, and Welsh councils can charge a premium of up to 300% on second homes and long-term empty homes. For 2026 to 2027, 20 councils charge a second homes premium. Rhondda Cynon Taf, which covers Aberdare, charges 100% from April 2024, and Swansea 100% from April 2021.

Letting rooms in your own home

Short-stay accommodation is not normally rated for business rates if no more than six guests stay at once and it is in your only or main home, so letting rooms in your own home usually stays under council tax.

• Rent a Room Scheme. Up to £7,500 a year from furnished accommodation in your only or main home is tax-free, halved to £3,750 if the income is shared.
• Property allowance. Up to £1,000 a year of property income is tax-free. Above that you choose the allowance or your actual expenses, and it cannot be used on income already covered by the Rent a Room Scheme.

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