Welsh final Budget 2026–27: Taxes largely remain unchanged

Finance Secretary Mark Drakeford said it "provides stability and certainty to public service" and was an example of "parties working together to secure the vital resources people, business and public services need for the year ahead".

He was referring to the fact that the minority Labour administration in Cardiff has worked with Plaid Cymru to agree the budget, reaching a deal in December which included additional resources for local government and health services. Plaid will not vote for the budget but will abstain to allow it to pass.

Income Tax: No changes for 2026-27

The Welsh government has decided to retain current income tax thresholds and rates for the 2026-27 fiscal year. This means Welsh taxpayers will continue to pay the same rates as those in England and Northern Ireland.

The UK government will increase the rate of tax charged on property rental income from 2027/28, as confirmed in the UK Budget, and provision is made in the current Finance Bill for the Senedd to be given devolved powers to set its own property tax rates.

Land Transaction Tax (LTT): rates unchanged

LTT rates will remain unchanged for 2026-27.

Landfill Disposals Tax (LDT): significant rate increases

From 1 April 2026, rates for LDT will rise:

• Standard rate: £130.75 per tonne
• Lower rate: £8.65 per tonne
• Unauthorised disposal: £196.15 per tonne

Non-Domestic Rates: reduction in standard multiplier rate 

The next non-domestic rating list will start on 1 April 2026, following revaluation. This is the second revaluation this Senedd term and the first under the new three-year cycle of non-domestic rates reforms. Due to the 2026 revaluation, the standard multiplier in Wales will drop to 0.502 for 2026-27, marking its first decrease since 2010.

For the 2026-27 period, the lower retail multiplier will be 0.350, while the higher multiplier will be 0.515.

Council tax: No cap imposed

An additional £112.8 million has been allocated to support local authorities. However, the final Welsh Budget makes no mention of introducing a cap or freeze on council tax rates. The Welsh government holds powers to limit excessive increases in local authority budget requirements, but these powers have never been exercised.

Political reaction

Welsh Conservatives: The shadow finance secretary, Sam Rowlands, said: “Plaid and Labour's budget stitch-up is a bad deal for Wales”. He added that a Budget that “contains funding for an ever-bloating bureaucracy… will not address the people's priorities”.

Plaid Cymru: Commenting on the budget agreement in December, party leader Rhun ap Iorwerth said that by allowing the budget to pass in return for the necessary increases in health and council budgets, Plaid were ensuring ensured that Labour’s ‘catastrophic’ proposed cuts were avoided. While this remained Labour’s budget to own, Mr ap Iorwerth said without Plaid Cymru stepping in, the next Welsh Government after May’s Senedd election would inherit far weaker foundations and that his party had “acted to protect services now” and to “create a more sustainable position for a new government”.

Next Steps

A final vote on the Welsh Budget will be held in the Senedd on 27 January. With Plaid agreeing to abstain (see above) the Welsh Labour government should be able to pass the budget easily.

You can find all the Budget documents here. The Welsh Finance Secretary's statement can also be read here.