The Outline Draft Budget Report sets out the spending and financing plans of the Welsh Government for 2026-27. The Detailed Draft Budget will be published on 3 November 2025 followed by the Final Budget, on 27 January 2026.  

A number of announcements have been made regarding the devolved taxes and to local taxes, including non-domestic rates. The devolved taxes are: Welsh rates of income tax; LTT; and landfill disposal tax (LDT) 

Key announcements for 2026-27 

• There will be no increases to the Welsh rates of income tax or to the thresholds for LTT.
• Rates of LDT will increase by the forecast Retail Price Index.
• A new refund rule for the higher residential rates of LTT will apply where a landlord leases a dwelling to a local authority in Wales through the Leasing Scheme Wales.
• The rules for LTT MDR will be amended to:
  • introduce a new equalisation rule “to create per-dwelling parity between multiple-dwelling and single-dwelling transactions liable to the higher residential rates”; and
  • increase the existing multiple dwelling relief minimum tax rule rate from 1% to 3%.

The Welsh Government will also review the effectiveness of the LTT relief for registered social landlords and consider whether it should be replicated for local authorities in Wales.

Non-domestic rates

The Draft Budget provides an update on the reform of local taxes, including non-domestic rates, and indicates that the Welsh Government is planning to introduce a lower multiplier to reduce non-domestic rates bills for small to medium-sized retailers for 2026-27. The Welsh Government’s non-domestic rates arrangements for 2026-27 will be determined as part of the preparations for the Final Budget. 

Further information

• Welsh tax policy report 2025
• £27bn Draft Budget “just the start” – Finance Secretary | Welsh Government News