Welsh Assembly Approves Tourist Tax

Councils in Wales are tightening their grip on holiday lets with a double whammy that orders landlords to collect a tourist tax from visitors.

The Visitor Levy Bill allows councils to charge tourists £1.30 a night for stays in holiday lets and other charges for staying on campsites, hostels and other accommodation.

The second part of the law requires landlords to register their accommodation with the Welsh Revenue Authority (WRA) - the equivalent of England's HM Revenue & Customs.

Landlords charging for accommodation must register their properties from Autumn 2026.

The Welsh government says funds raised from the levy are ring-fenced and will be spent on costs related to hosting visitors, such as collecting waste, providing toilets and keeping streets clean.

The levy is expected to start from Spring 2027.

Pressures of tourism

Welsh Labour's Finance Secretary Mark Drakeford said: "It's a small contribution that will make a big difference. This historic legislation gives Wales the same tools used so successfully by destinations all over the world to balance the benefits and pressures of tourism between visitors and residents."

Visit Wales, the body that promotes Wales as a tourist destination for the government, counted 117 million overnight trips made into the country from England and Scotland during 2023, which is the last year for which data is available.

If only half of the 340 million nights British visitors spent in Wales attracted a £1.30 levy, the Welsh government would collect £221 million.

The holiday let register also has a second use for the Welsh government - maintaining a list of active properties. The register will count the nights a holiday let is occupied, so councils can properly apply council tax and business rates.

Thousands of holiday let owners are reeling from unexpected council tax bills after HMRC's Valuation Office Agency (VOA).

VOA confession

The agency has confessed to failing to tell around 10,000 accommodation providers about controversial council tax changes that have resulted in unexpected bills running into thousands of pounds.

The VOA has often claimed letters were sent to 10,828 'affected' properties in October 2022, but industry counts put the number of properties at more than 22,000. Now, a Freedom of Information request has revealed that the VOA was mistaken about the number of properties and failed to update the official database to cover them all.

Nicky Williamson, who chairs the Professional Association of Self-Caterers Wales, complained that almost all members who operate holiday lets in Wales reported not receiving any letters about the council tax change, nor sufficient notice before the new bills arrived.

The impact of the holiday let measures in Wales has seen tourism collapse, with trips down 27 per cent, nights spent at holiday lets down 29 per cent and tourist spending down 10 per cent.

House prices have also taken a knock, down 12.4 per cent in Gwynedd, the county with the highest number of holiday lets and home of Eryri national park.