Welsh Final Budget 2026-27: what it means for your money
The Welsh government has unveiled its Final Budget for 2026-27, announcing it will spend over £27bn on 'people and public services', with no change to income tax or council tax.
The final package follows a draft proposal published in early November – just weeks before Chancellor Rachel Reeves delivered the UK's Autumn Budget.
Here, Which? takes a closer look at what's included and how it will affect Welsh taxpayers.
No income tax changes in 2026-27
The Welsh government has confirmed income tax thresholds and rates will stay the same from 6 April.
This means Welsh taxpayers will continue to pay the same rates as people working in England and Northern Ireland.
This table shows the Welsh income tax rates for 2026-27:
| Tax band | Income threshold | Rate |
|---|---|---|
| Personal allowance | Up to £12,570 | 0% |
| Basic-rate | £12,571-£50,270 | 20% |
| Higher-rate | £50,271-£125,140* | 40% |
| Additional-rate | Over £125,140 |
*Those earning more than £100,000 will see their personal allowance reduced by £1 for every £2 they earn over the threshold, meaning that anyone who earns more than £125,140 will pay tax on all the income they earn.
Income tax is partially devolved to Wales and, as a result, the Welsh government has the power to raise or cut the three income tax rates (basic, higher and additional).
All other aspects of the tax remain the responsibility of the UK government, and HM Revenue and Customs administers income tax in Wales.
- Find out more: income tax in Wales
No cap on council tax rises
Wales does not have a council tax cap, but the Welsh government does have some powers to limit excessive increases in the budget requirement of local authorities.
These powers have never been used though, and there was no mention of a cap or freeze on council tax rates in the Final Budget for 2026-27.
However, an extra £112.8m was announced to support local authorities – a funding uplift of 4.5%.
- Find out more: what is council tax?
Land Transaction Tax (LTT) will stay the same
Land Transaction Tax (LTT) replaced Stamp Duty Land Tax in Wales in 2018.
Changes to LTT rates for home movers were introduced in 2022, raising the threshold at which people start paying the tax on residential properties from £180,000 to £225,000.
However, the Welsh government confirmed that there will be no change to LTT in 2026-27.
- Find out more: stamp duty calculator
Property income tax rise for landlords
The Final Budget document confirms that property income tax in Wales will rise by two percentage points from April 2027. This was first announced by the Chancellor in November's Autumn Budget.
It means the basic rate will increase from 20% to 22%, the higher rate from 40% to 42% and the additional rate from 45% to 47%. The change will also affect landlords with properties in England and Northern Ireland.
- Find out more: visit our landlord hub for the latest news
More money for education and apprenticeships
The Welsh government will provide £4.2m to help schools, colleges, and local authorities support children with additional learning needs.
There will also be an extra £5m spent on further education.
Another £5m is being provided to the country's apprenticeship programme. The government has promised to create 100,000 new apprenticeship opportunities before the end of the Welsh parliament's term.
Two-child benefit cap scrapped
Families in Wales will also benefit from the removal of the two-child benefit cap, announced in the Autumn Budget. The policy currently prevents families from claiming the Universal Credit child element – worth £292.81 a month – for a third or subsequent child born after 6 April 2017.
From April 2026, families will be eligible for £3,647 per child per year for all children in their household born after April 2017 (taking into account the inflation-based benefits uplift of 3.8%).
- Find out more: two-child benefit cap to be lifted from April 2026.
Boost for bus and train services
Funding worth £6m will be used to support the running of bus services with an extra £10m invested in the bus fleet and depots.
Welsh railways will also get a boost, with £2.8m allocated to train services to ease pressures on them.
What happens next?
The Final Budget marks the end of the process of deciding the country's financial plans for the next tax year.
A vote will be held in the Senedd Cymru (the Welsh Parliament) one last time on 27 January before coming into law.
