For 2026–27, Wales will keep existing LTT rates but revise Multiple Dwelling Relief and introduce a new refund rule for certain leased properties, while the LDT standard rate will rise in line with RPI.

Wales’ Cabinet Secretary for Finance has presented the Welsh government’s 2026–2027 tax proposals on 14 October 2025, which include raising landfill disposals tax (LDT) rates while maintaining current rates for Welsh rates of income tax (WRIT) and land transaction tax (LTT).

Land transaction tax (LTT)

For 2026-27, the residential and non-residential rates and thresholds for LTT will remain unchanged. There will be changes to the Multiple Dwelling Relief (MDR) regime, which introduces a new “equalisation” rule to create per-dwelling parity between multiple-dwelling and single-dwelling transactions liable to the higher residential rates, and to increase the existing MDR minimum tax rule rate from 1% to 3%.

A new refund rule for the higher residential rates of LTT will be introduced. It will apply when a private landlord purchases a dwelling and leases it to a local authority in Wales under the Welsh Government’s Leasing Scheme Wales, which aims to provide more affordable housing. The transaction will remain subject to the main residential rates of LTT.

In May 2025, the Affordable Housing Taskforce recommended that the Welsh government should provide an LTT relief to local authorities when they buy property for social housing purposes, similar to the existing relief for registered social landlords (RSL).  The government will review the effectiveness of the current RSL relief and consider whether it is appropriate to replicate it for local authorities.

Landfill disposals tax (LDT)

The draft budget proposes to increase the standard rate of LDT for 2026-27 by the forecast Retail Price Index (RPI), while maintaining the lower rate and the unauthorised disposals rate at 5% and 150% of the standard rate, respectively. The new rates will be published on 26 November 2025.

The monetary value of the rates will be based on the Office for Budget Responsibility’s (OBR) updated forecasts of RPI, which will be published alongside the UK Government’s Autumn Budget on 26 November. This will ensure public services in Wales continue to benefit from the tax revenues and that LDT continues to contribute to the reduction of waste to landfill while minimising the risk of the movement of waste across borders.

Income tax (WRIT)

The Welsh Government will set the Welsh rates of income tax at 10p in each band, subject to Senedd approval prior to the Final Budget for the three income tax rates (basic, higher and additional). This maintains the current levels and will deliver parity of income tax rates for taxpayers in Wales with those in England and Northern Ireland. This means there will be no changes to WRIT in 2026-27.

The current Ready Reckoner for WRIT provides estimates of the potential revenue impact from changes to each of the three Welsh Rates of Income Tax in 2026-27. To accompany the Final Budget, the government will publish an updated Ready Reckoner which will incorporate the autumn WRIT forecast for 2026-27 and provide a new forecast for 2027-28.