Short-Term Let Business Rates: Counting Nights Guide

As more rigid rules for claiming short-term let business rates come into force, landlords must relearn how to count the number of nights guests have stayed in their properties.

The Valuation Office has warned landlords could face court for supplying false information that determines if a short-term let qualifies for business rates.

The counting rules have become important as landlords must open homes as available to let for much longer to qualify to pay business rates rather than council tax.

And confusingly, the number of qualifying days differs if a property is in England or Wales.

Counting rules for England

In England, to claim business rates, self-catering lets must be:

• Rented to paying guests at a commercial rent
• Available to let for at least 140 nights in the prior and current years
• Let for at least 70 nights in the previous year

Counting rules for Wales

In Wales, the time limits are much longer, with the properties:

• Rented to paying guests at a commercial rent
• Available to let for at least 252 nights in the prior and current years
• Let for at least 182 nights in the previous year

How to keep count of letting days

The Valuation Office will keep a tally of letting days by ordering landlords to complete a Request for Information form. Councils use the data from the forms to set business rate tariffs.

To count a short-term letting property as rented out, the Valuation Office will need confirmation the home was occupied immediately before midnight on a specific day.

For example, a short break from Friday evening to Sunday morning is a two-night stay when keeping a tally for business rates qualification.

The short-stay rules only apply to self-catering furnished lets - hotels, guest houses, and hostels are exempt.

What's the market rate?

Landlords should only file a Request for Information form when the Valuation Office asks.

The new rules started on April 1, 2023.

A commercially let property is rented out with the intention of making a profit.

"This usually means the property is let at market rates and actively advertised. For example, using holiday cottage websites, estate agents, and tourist web pages to advertise the property," said a Valuation Office spokesman.

"Any non-commercial lettings, for example, lettings to family and friends for amounts below market rates, would not count towards commercial lettings."

New holiday let counting rules FAQ

What happens if a property is let in England for less than 70 nights a year?

You can still run the property as a holiday let, but the property will not qualify for business rates - you will pay more expensive council tax instead.

What happens if a property is let in Wales for less than 140 nights a year?

You can still run the property as a holiday let, but the property will not qualify for business rates - you will pay more expensive council tax instead.

What is the Valuation Office?

The Valuation Office is a government agency that gives property valuations and other advice to calculate taxes, such as capital gains and inheritance taxes.

Must landlords respond to a Valuation Office information request?

Landlords must respond to the data request within 56 days or face possible court action.

Can I file information request data online?

The Valuation Office has an online data collection process.

You'll need the following:

• The reference number from the letter the Valuation Office sent to you
• Your lease or agreement, including the current rent you pay or any tenants' details if you're the owner
• Information about any recent changes to your rent or any rent-free periods
• Details of any sub-lettings
• Information about any changes you've made to the property, including costs

The Valuation Office

When can I expect a data request?

The Valuation Office will check how long a short-term let is occupied on a rolling basis so landlords can receive a request at any time.

What's the difference between rates and council tax?

Business rates and council tax are similar types of property taxes. Typically, commercial landlords pay business rates, while those renting out residential property pay council tax.

Holiday lets are a hybrid, treated as businesses but mainly comprise residential property.

Availability and actual rented days are counted to qualify for business rates, which are cheaper than council tax. The owner can claim business rates if the count exceeds the threshold.

Finding out more about business rates

The Valuation Office website hosts a free video explaining how business rates work.

The Valuation Office