In England a short let pays business rates instead of council tax only if it was available to let for at least 140 nights and actually let for at least 70 nights in the previous 12 months; otherwise it stays on council tax. Business rates are usually the better outcome, because most single holiday lets have a rateable value under £12,000 and pay nothing at all under small business rate relief, whereas a second home on council tax can now be charged a 100% premium.
The detail
The test has applied in England since 1 April 2023: lets of 28 nights or less, available for at least 140 nights and actually let for at least 70 in the previous 12 months, with an intention to make it available for 140 nights in the next 12. The Valuation Office Agency decides which list a property sits on, and it can ask for evidence — booking records, platform statements — that the 70 let nights were commercial lettings to the public at a market rate rather than stays by family and friends. A newly bought property has no trading history, so it starts on council tax and moves to the rating list once it has 12 months of figures behind it; budget the first year at council tax.
Once on the rating list, the number that matters is the rateable value. The VOA sets it from the property's size, location and letting capacity, and for a typical two-bedroom holiday let it is comfortably under the £12,000 threshold at which small business rate relief is 100%. Relief tapers between £12,000 and £15,000 and disappears above it, and it is designed for one property: you keep it after buying more only if each additional property has a rateable value under £2,900 and the total stays under £20,000 (£28,000 in London), so a second holiday let of any size is usually rated in full. The bill on a rated property without relief is the rateable value multiplied by the year's business rates multiplier, and it is deductible against rental income.
The council-tax side has got more expensive. Since April 2025 English councils have been able to charge a 100% premium on furnished second homes under the Levelling-up and Regeneration Act 2023, and most of the coastal and rural councils where holiday lets cluster have adopted it. A property that misses the 70-night test in a soft year can therefore go from a nil business-rates bill to double council tax in one revaluation. Wales applies a higher 252-and-182 test with a premium of up to 300%; Scotland has its own version of the rule alongside licensing.
The numbers that matter
Where this stops holding
Rateable values, multipliers and relief thresholds are those in force for 2026-27 and are revalued periodically, so a property that qualifies for full relief today may not after the next revaluation. Whether a council charges the second-home premium is decided locally each year. And this covers England; the Welsh and Scottish tests differ in both thresholds and consequences.
Sources
- GOV.UK — business rates for self-catering and holiday let accommodation
- GOV.UK — small business rate relief
- Levelling-up and Regeneration Act 2023
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