Calls to overhaul Wales’s controversial 182-night holiday-let rule are intensifying as rural businesses warn it is crippling tourism, distorting the housing market and pushing family farms to breaking point.
Introduced in April 2023, the policy requires self-catering properties to be available for 252 days and actually let for 182 days a year to qualify for business rates. Anyone falling short is reclassified as a second home and hit with council tax bills that, in some areas, attract premiums of up to 300%.
Two and a half years on, industry figures suggest around 40% of Welsh holiday lets are failing to meet the threshold — leaving many family-run tourism businesses questioning their future in a sector worth an estimated £3bn a year to the Welsh economy.
The Let’s Review 182 campaign, launched by Dioni Holiday Cottages owner Gwion Llwyd, is calling for urgent reform. It wants the Welsh government to reduce the threshold to 105 nights — the most widely supported option in its own consultation — and introduce a two-year grace period so owners are not punished for a single difficult season.
“This isn’t about politics; it’s about fairness and common sense,” said Gwion, who also runs the family farm in Dyffryn Ardudwy. He said the rule “was meant to deter second homes”, but is instead hitting responsible operators “for a housing problem they didn’t create”.
For many farming families, the impact has been severe. One farmer from Meirionnydd, who asked not to be named, said the rule has pushed his diversified business into crisis.
He converted old farm buildings into a 5-star holiday cottage to support the farm’s income, but the new rules were applied retrospectively — meaning he was assessed against thresholds that did not exist at the time.
“We fully complied with the old rule of 140 days availability and 70 days actually let,” he said. But after the change to 252/182, he was told he had not met the new requirement for the previous year, despite following every rule then in place. “The process has been inconsistent, confusing, and deeply unfair.”
Now removed from the business rating list, he faces a council tax bill of several thousand pounds — even though planning conditions prevent the cottage from being used as a residential home.
He said the financial and mental strain has been “immense”, especially alongside uncertainty over the Sustainable Farming Scheme, tourist tax plans, new licensing proposals and potential Inheritance Tax changes.
“We’re facing a race to the bottom on pricing to fill 182 days, while costs keep rising,” he said. “We’re not alone in asking ourselves whether it’s worth carrying on.”
Estate agents say the policy is also freezing the rural housing market. Although intended to make homes more affordable for local people, Rhys Elvins of Elvins Estate Agents in Abersoch said the assumption simply does not match reality.
“The policy assumes there’s a queue of local buyers waiting for these properties. There isn’t,” he said. Many suitable first-time buyer homes remain unsold, while the large, high-spec holiday cottages coming onto the market “are way beyond the average family’s needs and budget”.
“What we’re seeing is properties stuck in limbo,” he said. “They can’t operate as viable holiday lets under the 182 rule, but they’re not selling as residential homes either. The market has essentially frozen.”
The ripple effects are hitting the wider rural economy. Tradespeople, suppliers and hospitality venues are already reporting a drop in business. Fred Brooks, who runs a pub with rooms and a restaurant in Barmouth, said winter trade — crucial for survival — is noticeably down.
“It hits pubs, cafés and restaurants hard — especially in winter,” he said. He argued the rule “punishes” genuine tourism businesses for seasonality no one can control.
Shops and cafés closing for months to stay under VAT thresholds, fewer visitors in the shoulder seasons and empty holiday lets all feed into what he calls “a system working against year-round tourism”.
“We need a policy that recognises reality — that Welsh tourism is seasonal, that weather matters, and that small businesses need breathing room, not impossible targets,” he said.
The Let’s Review 182 campaign supports tackling Wales’s housing challenges but says the current rule is too blunt to be effective. “We agree that second homes should pay more — that’s not in question,” Gwion said.
“But the 182 rule is an economic own-goal. It’s forcing viable businesses to close while doing nothing to improve affordability for local families.”
The Welsh government is currently reviewing the rule via a public consultation open until 20 November 2025. Campaigners are urging business owners, residents and workers to respond before the deadline.
