Welsh Ministers have made the Council Tax (Exceptions to Higher Amounts) (Wales) (Amendment) Regulations 2026 (WSI 2026/89), inserting a new Class 8 into the 2015 Regulations. The instrument was made on 20 March 2026 and comes into force on 1 April 2027.
Class 8 applies to any dwelling that becomes domestic because it no longer meets section 66(2BB) of the Local Government Finance Act 1988 (the self‑catering test). For one year from the date it ceased to be non‑domestic under that provision, a billing authority may not apply a council tax premium to that dwelling.
In Wales, section 66(2BB) treats self‑catering holiday accommodation as non‑domestic where it is available to let for at least 252 days and actually let for at least 182 days in the previous 12 months. Properties that do not meet the test revert to council tax until evidence supports a Valuation Office Agency re‑assessment back to non‑domestic rating. (businesswales.gov.wales)
The amendment creates a defined, time‑limited protection from premium charges for operators who fall short of the letting criteria in a given year. It does not reduce the standard council tax that remains payable during the 12‑month period, nor does it alter entitlement under the separate council tax reduction schemes.
Since April 2023, Welsh billing authorities have been able to set premiums of up to 300% on long‑term empty properties and on dwellings occupied periodically, using powers in sections 12A and 12B of the 1992 Act as amended. Those powers are subject to prescribed exceptions in the 2015 Regulations; Class 8 is now one of those prescribed classes. (gov.wales)
Welsh Government guidance states that liable persons are responsible for applying for an exception and must provide evidence to their local authority. Taxpayers should therefore expect to evidence the reclassification date and the previous business‑rates status when seeking the Class 8 exception. (gov.wales)
Related changes to the self‑catering test are also relevant. From 1 April 2026, where 182 days’ actual lettings are not met in the most recent 12 months, evidence of average days let over two of the previous three years may be considered. Guidance also sets out how operators can present evidence if seeking re‑assessment by the Valuation Office Agency. (businesswales.gov.wales)
For billing authorities, the practical tasks are straightforward but time‑sensitive: ensure premium determinations and back‑office rules for 2027‑28 reflect the new Class 8, and record the precise reclassification date because the one‑year exception runs from that point. For owners and agents, the change provides a predictable window to either meet the letting test again or plan for ongoing council tax liability.
The Regulations were signed by the Cabinet Secretary for Finance and Welsh Language and accompanied by a Regulatory Impact Assessment. The Welsh Government indicates that copies can be obtained from the Local Government Finance Reform Division and that the assessment is published on GOV.WALES.
The policy effect is narrow and targeted: it prevents immediate premium charges where a former business‑rated holiday let moves back into the council tax system, while maintaining the standard charge. After 12 months, premium powers apply again in line with each authority’s adopted policy on second homes and long‑term empty dwellings. (gov.wales)