England Holiday Lets and Mixed-Use Rating Rules 2026

Small legal changes can sound dry until they change which tax system your property sits in. This new statutory instrument does exactly that. The Non-Domestic Rating (Definition of Domestic Property) (England) Order 2026 was made on 25 June 2026, laid before Parliament on 29 June 2026 and comes into force on 24 July 2026. In plain English, the Order changes part of the rulebook used to decide when certain self-catering holiday lets count as domestic property and when they should sit in the non-domestic rating system, better known to most people as business rates. The legal text also says the Order extends to England and Wales. If you run holiday accommodation, or you are simply trying to understand how local tax law works, this is one of those technical updates that matters more than its title suggests.

Before this Order, one important way for a holiday let to be treated as non-domestic property depended heavily on what happened in the previous year. The explanatory note published on legislation.gov.uk says the owner had to intend to let the property commercially as self-catering accommodation for short periods totalling 140 days or more in the following year, while also meeting conditions linked to the year before. Those earlier conditions were the sticking point. The property had to have been available to let for at least 140 days, and it had to have actually been let for at least 70 days. **What this means:** the law was not only asking what you planned to do next, but also asking for proof that the property had already been on the market and genuinely used as holiday accommodation.

The first major change is aimed at mixed-use settings. The Order inserts a rule for a building, or a self-contained part of a building, that is occupied together with land used for something else, where that other land is not domestic property. Think of a holiday unit attached to a farm, a tourism business or another wider commercial site rather than a stand-alone cottage operating on its own. For those mixed-use cases, the Order removes the need to meet the same previous-year tests on 140 days of availability and 70 days of actual letting. **What this means:** if the holiday accommodation is part of a broader non-domestic set-up, the law is now less rigid about demanding that exact past-year letting record. Other parts of the legal test still matter, but those two hurdles are lifted for this category.

The second change matters for larger holiday-let sites. The Order creates another exception where a property is part of a relevant hereditament that includes five or more buildings or self-contained parts used as self-catering accommodation, as long as they are not anyone's sole or main residence. Hereditament is classic rating-law language, and it is not reader-friendly. For most of us, the simplest way to read it is as the property unit used for business rates. The Order also says hereditaments separated only by a highway can still be treated as one relevant hereditament for this purpose. Again, the practical effect is narrow but important: for sites with five or more holiday units, the same previous-year 140-day and 70-day tests no longer have to be met in order for this part of the rule to work.

It is just as important to notice what this Order does not do. It does not rewrite the whole system for holiday lets, and it does not say every self-catering property automatically falls into business rates from 24 July 2026. A small stand-alone holiday let can still find itself judged under the older approach, where the previous year's availability and actual letting record remain central. The legislation.gov.uk note is clear that this is an amendment to section 66 of the Local Government Finance Act 1988, which defines domestic property for non-domestic rating purposes. So the change is targeted. It relaxes two earlier evidence tests for mixed-use properties and for larger groups of holiday units, but it leaves the wider framework in place.

There is also a small but revealing line at the end of the instrument. No impact assessment was produced because the Government says this measure amends an existing local tax regime, and publication of an assessment was not necessary for legislation of this kind. That does not mean the change is minor for the people affected by it. It means ministers treated it as an adjustment inside an existing system rather than a brand-new policy scheme. The Order was signed by Alison McGovern, Minister of State at the Ministry of Housing, Communities and Local Government, on 25 June 2026. For anyone learning how rules change in real life, this is a useful reminder that plenty of tax law moves through secondary legislation rather than through a headline Act of Parliament.

If you want the shortest possible version, it is this: from 24 July 2026, the law becomes more flexible for some holiday lets that sit inside mixed-use properties or within larger sites of five or more self-catering units. In those cases, the old need to prove 140 days of availability and 70 days of actual letting in the previous year falls away. **What you should take from this:** the key question is no longer only whether a holiday let met two neat numerical tests last year. You also have to ask whether it is part of a wider non-domestic property or a bigger holiday accommodation site. That is the real teaching point in this Order. The drafting is technical, but once you strip back the legal wording, the rule change is actually quite straightforward.