Welsh Ministers have made the Non-Domestic Rating (Chargeable Amounts) (Wales) Regulations 2025 (WSI 2025/1371), signed on 17 December 2025 and commencing on 31 December 2025. The instrument prescribes transitional rules for calculating non-domestic rates from 1 April 2026 to 31 March 2029, limiting sharp increases arising from the 2026 revaluation.
Using powers in sections 58 and 143A of the Local Government Finance Act 1988, and approved by a Senedd Cymru resolution, the Regulations revoke the 2022 regime. In line with section 58(9), Welsh Ministers have recorded that they considered the objective of avoiding an aggregate non-domestic rates yield above what would likely be payable without these provisions.
The rules apply only to defined hereditaments. In practice, the property must appear on a local rating list or the central list on 31 March 2026, on the relevant chargeable day, and on every intervening day. If a property is removed from a list, the transitional rules stop applying from the date of removal, without disturbing calculations for earlier days.
Eligibility is narrow by design. The same person must have occupied the hereditament on 31 March 2026 and be the liable ratepayer on the relevant day during 2026–2029. The increase in annual liability on 1 April 2026 must exceed £300; if the increase is £300 or less, the phasing does not apply. Transitional rules are unavailable if the property was unoccupied on 31 March 2026, or where a billing authority has required a section 44A part-occupation apportionment.
Two reference figures underpin the calculation. The base liability (BL) is the chargeable amount for 31 March 2026 determined under section 43 (occupied local-list properties) or section 54 (central list), annualised by multiplying by 365. The notional chargeable amount (NCA) is the annualised amount that would apply from 1 April 2026 under section 43, section 45 (for unoccupied local-list properties) or section 54, assuming no transitional rules.
If the statutory charge for a property falls on a date after 1 April 2026-for example because a new figure takes effect on the list-the NCA is recalculated from that effective date. The recalculation uses the new charge and the number of days in that financial year; 2028 is treated as 366 days. This ensures the phasing reflects the most recent lawful charge from the day the change applies.
Where the conditions are met, billing authorities first compute the daily charge under sections 43, 45 or 54 and then reduce it by a prescribed amount. For financial year 2026–27, the reduction equals 67% of the increase between NCA and BL, applied per day. For 2027–28, the reduction is 34% of the same increase. For 2028–29, no reduction applies and bills reflect the full charge. A statutory floor prevents any negative outcome.
An illustration highlights the mechanics. Suppose the annualised BL is £10,000 and the NCA is £14,000; the increase is £4,000. In 2026–27, the bill is reduced by 67% of £4,000 (£2,680), apportioned across the chargeable days of that year. In 2027–28, the reduction is 34% of £4,000 (£1,360). From 1 April 2028, the full charge applies, subject to any separate reliefs that operate outside these transitional rules.
Continuity is critical. If the liable ratepayer changes on 1 April 2026 or at any time up to 31 March 2029, the hereditament falls outside the prescribed description and transitional reductions cease to apply thereafter. Properties benefitting from section 44A part-occupation apportionment are also excluded while that apportionment has effect.
The instrument applies across Wales to both local-list properties and assets on the central list. It anchors calculations to the final day of the pre-2026 regime while phasing in increases triggered on 1 April 2026. The Regulations were signed by Mark Drakeford as Cabinet Secretary for Finance and Welsh Language. Finance teams should now verify BL, NCA and continuity conditions for each hereditament ahead of 2026–27 billing.