Business rates or council tax: the 140-day rule
In England, whether a holiday let pays business rates or council tax depends on how much it is available and actually let. A self-catering property is assessed for business rates if:
- It is intended to be available to let for at least 140 days in the following 12 months.
- It was available to let for at least 140 days in the previous year.
- It was actually let for at least 70 days in the previous year.
If the property meets all three tests, it is entered in the rating list and pays business rates. If it doesn’t, it pays council tax like any other home.
The HMRC Valuation Office may ask for evidence, such as booking records or listings, to show the property meets the tests. If your letting pattern changes and the property no longer qualifies, tell the Valuation Office so it can be moved back to council tax.
Wales sets its own day thresholds for holiday lets, and Scotland runs its own separate business rates system, so the rules on this page apply to England.
How rateable value is assessed for holiday lets
Like any other business property, a holiday let’s rateable value is the HMRC Valuation Office’s estimate of the annual rent it could have achieved on the open market at the valuation date. For the 2026 rating list, that date is 1 April 2024.
For holiday lets, the Valuation Office looks at letting evidence from comparable self-catering properties and at the property itself:
- Location - coastal, rural or city, and proximity to attractions.
- Size and number of bedrooms.
- Facilities - such as a hot tub, pool, parking or outdoor space.
- Type and quality of accommodation.
The rateable value reflects what the property could achieve as a holiday let, not what you actually earn from it in any one year.
Relief eligibility for holiday lets
Once a holiday let is in the rating list, the usual reliefs apply:
- Small Business Rate Relief - if the holiday let is your only business property and its rateable value is £12,000 or below, you get 100% relief and pay nothing. Relief tapers between £12,001 and £15,000. If you own more than one holiday let, each additional property must have a rateable value below £2,900 and the total must be below £28,000, or you lose SBRR on all of them.
- Retail, hospitality and leisure (RHL) multipliers - from 1 April 2026, qualifying RHL properties with a rateable value below £51,000 are billed at 38.2p rather than 43.2p. Whether a holiday let is classified as hospitality is a matter for your local council, so check how yours is billed.
- Transitional Relief and the Supporting Small Business scheme - limit how fast your bill can rise after the 2026 revaluation, including where you lost Small Business Rate Relief because your rateable value went up.
For the full list of reliefs, see our full list of ways to reduce business rates. For how the relief thresholds work, see our Small Business Rate Relief guide.
Why a holiday let’s rateable value matters
For many holiday let owners, the difference between paying nothing and paying a full bill is the £12,000 Small Business Rate Relief threshold. The 2026 revaluation pushed a significant number of previously eligible businesses above that threshold.
If your holiday let’s rateable value rose in the revaluation, check whether the new figure is right. Common grounds for a challenge include:
- Comparable holiday lets nearby assessed at lower values.
- Errors in the property record, such as the wrong number of bedrooms or facilities listed.
- A location or access issue that reduces letting potential.
Check your holiday let rateable value now
Owners of several holiday lets
If you own several holiday lets, each is usually assessed separately, and Small Business Rate Relief is unlikely to apply once you have more than one property above £2,900. A coordinated review can check valuation consistency across all of them. See our business rates portfolio review.