The Welsh Rates of Income Tax (WRIT) (Property Income) Regulations 2026 came into force on 24 September 2026, formally activating the Welsh Government’s power to set distinct income tax rates on property income (rental profits) for Welsh taxpayers. This marks the first exercise of the devolved property income tax powers under the Wales Act 2017. For the 2026/27 tax year, the Welsh Government has set the property income rates at: Basic Rate 10%, Higher Rate 12%, and Additional Rate 14%—creating a 2% and 4% differential respectively compared to the UK rates. The change applies to individuals with rental income from properties located in Wales, regardless of the landlord’s residence.
Key Takeaways
- Immediate Compliance Impact: Landlords and agents must ensure PAYE codes and Self Assessment returns for 2026/27 correctly apply the Welsh rates. HMRC will issue revised coding notices (prefix ‘C’) to affected taxpayers by October 2026.
- Cross-Border Complexity: Landlords resident in England but letting Welsh properties (and vice versa) face dual reporting obligations; the property location determines the applicable rate, not the landlord’s residence.
- Revenue Forecast: The Welsh Office for Budget Responsibility projects £85m additional revenue in 2026/27 from the higher differential, earmarked for housing supply initiatives.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement