UK holiday let regulations explained: EPCs, tourism tax, and business rates
- Feb 7
- 3 min read
The regulatory landscape for UK holiday lets has shifted significantly – and in some cases unexpectedly – over the past year.
On a recent episode of the Host Planet Podcast, Alistair Handyside, Chair of PASC UK, explained what short-term rental owners need to understand about EPC requirements, tourism taxes, and business rates – and why co-ordinated action across the sector is more important than ever.
This article breaks down the key takeaways for holiday let owners, hosts, and property managers across England and Wales.
Are EPC requirements changing for holiday lets?
One of the biggest concerns facing UK holiday let owners in 2024 and 2025 was the proposed requirement for properties to reach an EPC rating of C.
According to Alistair Handyside, this requirement will not apply to the self-catering sector.
Why? Because industry bodies – including PASC UK – successfully demonstrated to government departments that:
Holiday lets are not driving people out of long-term housing
Fuel poverty frameworks do not apply in the same way to short-term accommodation
Mandatory upgrades would impose disproportionate costs, particularly on older rural properties
In many cases, owners of stone cottages and heritage homes were facing upgrade costs of up to £15,000 per property, with limited environmental benefit.
More than 6,500 operators contacted their MPs, helping secure a reversal of the policy. The outcome is widely regarded as one of the most significant regulatory wins for the UK self-catering sector in recent years.
Key takeaway: Holiday let owners are not required to upgrade properties to EPC C under current proposals.
Is a tourism tax coming to England?
Tourism taxes – sometimes called visitor levies – remain a live policy discussion in England.
A formal government consultation is now underway, and while no tax has been confirmed, the sector remains concerned.
Alistair highlighted several risks:
Accommodation providers would shoulder the cost, while day visitors pay nothing
Many visitor economy businesses are already heavily taxed
There is limited transparency on how levy funds would be spent
The Mayors of London, Manchester, and North Yorkshire have said they would welcome the introduction of a visitor levy on short-term rentals
Although central government has indicated that any national levy is unlikely before 2029, political momentum – particularly among metro mayors – means the issue is far from settled.
Key takeaway: A tourism tax is not inevitable, but holiday let owners should engage with consultations to shape any future proposals.
Why are business rates becoming a bigger issue?
Business rates were another major focus of the discussion.
While many holiday lets remain on council tax, operators who do pay business rates – especially those offering catering or hospitality services – are facing steep increases.
According to PASC UK:
Business rates in England have risen by up to 57% over three years
In Wales, increases of up to 87% have been recorded
The removal of the 40% hospitality discount has compounded the impact
At the same time, the government is reviewing the 70-day trading threshold in England – a change that could push more properties into business rates if increased.
Key takeaway: Business rates reform is an emerging risk for short-term rental operators, particularly mixed-use and hospitality businesses.
What is the 182-day rule in Wales?
In Wales, regulation has gone further.
The 182-day letting threshold determines whether a property is assessed for business rates instead of council tax. Alistair described this as the single biggest issue facing Welsh holiday let owners.
Many operators – especially in rural and seasonal locations – simply cannot achieve 182 booked nights per year, leading to:
Higher tax liabilities
Financial strain
Growing mental health pressure among owners
With Welsh elections approaching, PASC UK is urging political parties to commit to reviewing or reducing the threshold.
Key takeaway: The 182-day rule is widely seen as unworkable and remains under intense scrutiny.
What should holiday let owners do next?
Alistair’s advice was clear and practical:
Stay informed using trusted industry sources
Respond to government consultations
Engage with MPs and local representatives
Support trade bodies that represent the sector
The EPC outcome, he noted, proves that evidence-based advocacy works.
Final thoughts on holiday let regulations
UK holiday let regulation is becoming more complex – but owners are not powerless.
The last year has shown that collective action, backed by data and real-world insight, can influence policy in meaningful ways. For hosts and property managers, staying engaged is no longer optional – it’s essential.
Holiday let operator FAQs
Do holiday lets need an EPC rating of C? No. Current proposals exclude the self-catering sector.
Is a tourism tax confirmed in England? No. A consultation is ongoing, but no tax has been approved. A number of mayors have said they would welcome the tax, however.
What is the 182-day rule in Wales? It’s the minimum number of nights required to qualify for business rates instead of council tax.
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