The Non-Domestic Rating (Definition of Domestic Property) (England) Order 2026

Published: Tue 30th Jun 26

This Order amends the Local Government Finance Act 1988 to modify the definition of domestic property in England specifically concerning self-catering accommodation.

It directs that the standard requirements for a property to have been available for 140 days and actually let for 70 days in the previous year to qualify as non-domestic do not apply to properties occupied with other non-domestic land or to sites containing five or more self-catering units.

These changes apply to property owners, valuation officers, and local billing authorities responsible for determining whether a property is subject to non-domestic rates or council tax.

Arguments For

The order states that it clarifies the criteria under which self-catering accommodation is classified as non-domestic property for rating purposes.
Proponents argue that the amendments ensure consistent treatment of multi-unit holiday let businesses and composite properties (those used for both self-catering and other non-domestic purposes) by exempting them from certain look-back letting requirements.
The document indicates that the 140-day availability and 70-day actual letting requirements remain the standard threshold for individual holiday lets to qualify for non-domestic rates rather than council tax.

Arguments Against

Legal scholars may question the complexity introduced by creating different sets of criteria for single versus multi-unit holiday lets.
Affected parties, such as small-scale holiday let owners who do not meet the five-unit threshold in subsection (2BZC), might argue the order creates an unequal playing field compared to larger commercial operations.
Local authorities may face administrative challenges in verifying the "relevant hereditament" status for properties separated by highways as defined in subsection (2BZD).

—(1) This Order may be cited as the Non-Domestic Rating (Definition of Domestic Property) (England) Order 2026 and comes into force on 24th July 2026.

(2) This Order extends to England and Wales.

This section establishes the official title of the legal instrument and sets the date it becomes legally effective as 24th July 2026.

It specifies that while the order applies to the legal jurisdiction of England and Wales, its substantive changes concern the rating regime in England.

In section 66 of the Local Government Finance Act 1988 (domestic property)—

(a) in subsection (2B)—

(i) in paragraph (b), after 'periods' insert—

', and

(ba) subsection (2BZA), (2BZB) or (2BZC) applies';

(ii) omit paragraphs (c) and (d);

(b) after subsection (2B) insert—

'(2BZA) This subsection applies if—

(a) the whole of the building or self-contained part was available for letting commercially, as self-catering accommodation, for short periods totalling 140 days or more in the year prior to the year beginning with the end of the day in relation to which the question referred to in paragraph (2B)(a) is being considered, and

(b) the short periods for which it was so let amounted in total to at least 70 days.

(2BZB) This subsection applies if the building or self-contained part is—

(a) occupied together with land which is used for a purpose other than the commercial letting of self-catering accommodation and is not domestic property, and

(b) part of a relevant hereditament which includes that land.

(2BZC) This subsection applies if the building or self-contained part is part of a relevant hereditament which comprises or includes five or more buildings or self-contained parts—

(a) in relation to which the requirements in subsection (2B)(a) and (b) are met, and

(b) which are not used as the sole or main residence of any person.

(2BZD) For the purposes of subsection (2BZB) and (2BZC), 'relevant hereditament' means—

(a) a single hereditament, or

(b) hereditaments separated by a highway which would comprise a single hereditament were they not so separated.'

This section amends the Local Government Finance Act 1988 to refine how self-catering properties are categorized as non-domestic property.

Paragraph (2BZA) maintains the existing requirement for standard single properties to be available for 140 days and let for at least 70 days in the preceding year to qualify for non-domestic rating.

Paragraphs (2BZB) and (2BZC) create exceptions to these look-back requirements for properties that are either part of a larger non-domestic site or part of a complex containing five or more units.

A 'relevant hereditament' is defined to include units that would be considered a single unit of property for rating purposes even if they are separated by a road.

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