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The Business Rates Rule For Holiday Lets Now Favours Big Operators

ended 25. July 2026

The line that decides whether an English holiday let pays business rates or council tax moved on 24 July 2026, and it moved in favour of the larger operator. A new order, SI 2026/692, lets two kinds of self-catering property onto business rates as soon as they are available to let for 140 nights a year, dropping the long-standing requirement to prove they were actually let for 70 nights. The first is a mixed-use let, such as a holiday let held together with working farmland; the second is any site of five or more self-contained units, such as an aparthotel. The government says these are properties clearly used for business purposes.

For the ordinary owner, nothing changes. A single holiday cottage still only counts as a business, and only reaches business rates, if in the past 12 months it was available to let for at least 140 nights and actually let for at least 70. Fall short of the 70 and it lands on council tax instead.

That switch is where the money is. On business rates, a small let with a rateable value of £12,000 or less can claim Small Business Rate Relief and pay nothing at all. On council tax the full bill is due, and since 1 April 2025 English councils can add a second-home premium of up to 100 per cent, doubling it, on a furnished property that is no one's main home. So the person left most exposed is the owner of a single cottage. A quiet summer that falls short of 70 let nights can move them from a zero business-rates bill to a doubled council-tax one, while the five-unit operator down the road is waved straight onto business rates without the test.

  1. The government says obviously commercial sites like aparthotels should never have been on council tax. Is it right to give them an easier route while the single-cottage owner still has to clear both tests?
  2. Who is most exposed to being bumped off business rates and onto council tax with a second-home premium on top?
  3. What should the owner of a single holiday let be doing now to make sure they stay on the right side of the line? Do you have a client whose plans this would change? If so, please give as much colour and detail as possible.

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Editor
Harvey Dhillon
Founder & CEO at Zmartly
From today, an aparthotel only has to be open for business. A single holiday cottage still has to prove it did business. Since 24 July, under SI 2026/692, an aparthotel or a working-farm holiday let reaches business rates once it is available to let for 140 nights a year. The old 70-nights-let test is gone for them. The ordinary cottage owner still needs both, or the property drops onto council tax. The government is right: a big aparthotel is plainly a business. But the slow-start trap it just fixed for them still catches the smallest owners. Most exposed is a genuine let having a quiet year, a washout summer, that clears 140 but misses 70. The swing is brutal. That let can pay nothing on business rates under Small Business Rate Relief. On council tax the full bill is due, and since April 2025 a council can double it with a second-home premium. So track your nights like takings. Know both numbers before the season ends, not when the bill lands.