From checking occupancy figures to understanding local visitor taxes, holiday-let owners and prospective buyers are being urged to look beyond the nightly rate when assessing whether a property is a viable investment.
This warning comes as the rules and costs surrounding short-term accommodation continue to evolve across the UK.
Searches for ‘holiday-let tax’ have increased by 300% over the past month, as renewed debate around Wales’ 182-day occupancy threshold coincides with the introduction of overnight visitor levies in Edinburgh and plans for a similar charge in Cardiff.
The developments have prompted renewed questions over how holiday accommodation should be taxed and regulated, but according to holiday home specialist, Laura Dubois of Together Travel, the biggest consideration for owners may be how these changes affect the long-term viability of a property.
Rather than simply looking at how much a property could earn during peak season, she is advising owners and anyone considering purchasing a holiday let to assess the property from several different angles.
Laura Dubois said: “The biggest mistake a prospective holiday-let owner can make is looking at the headline nightly rate and assuming that tells you whether a property is a good investment.
“Holiday lets are seasonal businesses, and their profitability depends on much more than the price you can charge for a week in August.
“With the regulatory landscape changing, owners should be looking at the full picture, including occupancy, local demand, taxation, running costs and how future policy changes could affect the property.”
Five things holiday-let owners should check:
1. Don’t base your numbers on peak-season occupancy
A property that can command a premium during school holidays may look extremely profitable on paper, but owners need to understand what happens during the quieter months.
Laura recommends looking at annual occupancy rather than the best-performing weeks, particularly for properties in highly seasonal destinations: “It is very easy to get excited about what a property can earn in July and August, but those figures can give a misleading impression of the annual return,” she said. “Before buying, look at how demand changes throughout the year and whether there are genuine reasons people would visit outside of peak season.”
This is particularly relevant in Wales, where the 182-day threshold has become a major point of debate. Welsh self-catering properties have generally needed to be available to let for at least 252 days and let for 182 days in a 12-month period to qualify for non-domestic rates rather than council tax.
A current Senedd petition is calling for the 182-day threshold to be replaced with a 105-day requirement, while the Welsh Government has already introduced greater flexibility around how the occupancy requirement can be met.
2. Check what tax rules apply before you buy
Prospective buyers should establish whether the property is likely to fall under council tax or non-domestic rates, rather than treating its potential holiday-let income as the only financial consideration. The distinction can have a significant impact on the overall economics of running a property.
“Tax should be part of the initial property research, not something you investigate after you’ve bought the property,” Laura added. “If you’re looking at a holiday let as a business, you need to understand what classification the property could fall under and what requirements you’ll need to meet.”
3. Find out whether your destination has, or is considering, a visitor levy
The spread of overnight visitor levies means prospective owners should also consider local tourism policy when assessing a property.
Edinburgh introduced a 5% visitor levy on paid overnight accommodation for stays from 24 July 2026, whilst Cardiff is preparing to introduce a visitor levy from 1 April 2027, charging £1.30 per person per night for most accommodation and 75p for campsites, pitches and shared accommodation.
For holiday-let owners, this means the local tax environment could become an increasingly important consideration when setting prices and forecasting future income.
“A visitor levy doesn’t necessarily make a destination less attractive, but it is another cost and administrative consideration for operators. Anyone considering buying should understand whether a levy applies, when it is coming into effect and how it will be collected before building their financial projections around a property.”
4. Investigate the property’s off-season potential
Rather than asking simply, “How much can I charge?”, Laura recommends asking “Who would stay here outside of summer?”
That could mean looking for properties with features that create demand throughout the year, such as hot tubs, indoor entertainment spaces, pet-friendly facilities, proximity to attractions or suitability for walking and outdoor breaks.
“A property’s biggest asset might not be its ability to attract an expensive summer booking, it could be its ability to generate bookings in February, November or March.
“Owners should think about what makes their property relevant throughout the year and who their potential off-season customer is.”
5. Leave room for change in your financial calculations
Perhaps most importantly, prospective owners should avoid assuming that today’s rules will remain unchanged throughout the lifetime of their investment.
The debate around Wales’ 182-day threshold demonstrates how quickly the regulatory environment can evolve, while the introduction of visitor levies shows that local authorities are also exploring new ways of funding tourism and local infrastructure.
Laura said: “Nobody can predict exactly what the holiday-let landscape will look like in five or ten years, so I wouldn’t recommend buying a property based on one very specific tax assumption.
“Build some flexibility into your calculations. If the property only works financially under the most optimistic occupancy figures and the most favourable tax treatment, that should be a warning sign.
“A strong holiday-let business should be able to stand up to some change.”
While the growing number of rules and taxes may initially appear daunting, Laura believes the changing landscape could ultimately encourage a more professional approach to holiday letting.
Rather than viewing regulation as an obstacle, owners who understand their market, monitor occupancy and plan for changing costs could be better positioned as the sector matures.
“The conversation shouldn’t simply be about whether holiday lets are being taxed more or whether there are more rules to follow,” Laura added. “There is an opportunity here for the sector to become more professional and sustainable. Owners who understand their numbers, know their market and plan ahead are going to be in a much stronger position than those who rely on peak-season demand and hope the rules don’t change.
“For prospective buyers in particular, the key message is to do your homework. The best holiday-let investment isn’t necessarily the property with the highest possible weekly rate, it is the one with a sustainable business model behind it.”