Welsh Ministers have made the Non-Domestic Rating (Chargeable Amounts) (Wales) Regulations 2025 (Welsh SI 2025/1371), approved by Senedd Cymru under section 143A of the Local Government Finance Act 1988. The Regulations come into force on 31 December 2025 and set the methodology for transitional relief linked to the 2026 revaluation, smoothing increases between 1 April 2026 and 31 March 2029.
The instrument applies to “relevant days” within the period 1 April 2026 to 31 March 2029. It covers hereditaments shown on either a local list (maintained under section 41ZA(10) of the 1988 Act) or the central list (section 52ZA(10)). Where a hereditament is removed from a list, the prescribed rules cease from the effective date of removal; prior days are unaffected.
Eligibility rests on the concept of a “defined hereditament”. To qualify on a given day, the hereditament must be shown in the relevant list on 31 March 2026, on that day, and on every day in between. This continuity test is central to the operation of the scheme and prevents relief applying where entries are interrupted.
The Regulations establish two anchor figures. The base liability (BL) is the chargeable amount for 31 March 2026, calculated under section 43 (occupied, local list) or section 54 (central list), multiplied by 365. There is no BL where the hereditament was unoccupied on 31 March 2026; the scheme is therefore confined to properties that were occupied on that date.
The notional chargeable amount (NCA) is the chargeable amount for 1 April 2026 calculated under section 43, section 45 (unoccupied, local list) or section 54, multiplied by 365. If a reduction to the statutory chargeable amount takes effect on a later date within 2026–2029, the NCA is recalculated from that effective date using the new chargeable amount and the number of days in that financial year (366 in 2028).
Transitional relief only applies where four conditions in regulation 6 are met. First, the NCA must exceed the BL by more than £300. Second, the person who was liable as ratepayer on 31 March 2026 must be the same person liable on the relevant day. Third, the property must have been occupied on 31 March 2026. Fourth, no apportionment under section 44A (partly occupied hereditaments) may apply or have effect in relation to the chargeable amount.
Where the conditions are satisfied, regulations 8 to 12 prescribe how to find the amount payable for each relevant day. The billing authority first calculates the ordinary chargeable amount under sections 43, 45 or 54 and then subtracts a transitional deduction. Regulation 9 caps the outcome at zero so that the chargeable amount cannot be negative.
The deduction phases out over two years. For 2026–27, the payable amount is reduced by 67% of the increase between BL and NCA. For 2027–28, the payable amount is reduced by 34% of that same increase. For 2028–29, no transitional deduction applies and liability is the statutory chargeable amount. Regulation 11 expressly accounts for 2028 as a leap year.
A simple illustration is instructive. If BL is £20,000 and NCA is £26,000, the increase is £6,000. In 2026–27, the deduction is 67% of £6,000 (£4,020), giving £21,980 payable. In 2027–28, the deduction is 34% of £6,000 (£2,040), giving £23,960 payable. In 2028–29, no deduction applies and liability is assessed on the statutory basis for that year.
Continuity of liability is critical. If the liable ratepayer changes on or after 1 April 2026, transitional relief does not apply to days after that change. The same is true if occupation changes such that section 44A apportionment is required. If a hereditament is removed from the list, relief ceases from the effective date of removal; earlier days are not disturbed.
Administration is bounded by the revenue constraint in section 58(9) of the 1988 Act, which the Welsh Ministers have considered, and by the timing requirement in section 58(8) that regulations commence before 1 January preceding the financial year of effect. The 2025 instrument revokes the Non-Domestic Rating (Chargeable Amounts) (Wales) Regulations 2022. The Regulations were signed on 17 December 2025 by the Cabinet Secretary for Finance and Welsh Language, Mark Drakeford.
For practitioners, the immediate tasks are to verify list continuity at 31 March 2026, establish BL and NCA from section 43/45/54 calculations, and apply the correct annual percentage deduction with the statutory zero floor. Ratepayers should review liability profiles for 2026–27 and 2027–28, noting that relief ends where there is a change of ratepayer, occupation triggers a section 44A apportionment, or an alteration removes the property from the list. A Regulatory Impact Assessment is available from the Welsh Government’s Non-Domestic Rates Policy and Reform Division.