The Autumn Budget: How is it affecting Wales?
The UK Budget sets the overall tax and spending rules for the whole country and shapes the financial environment in which Welsh households, businesses, and the Welsh Government operate.
As most of the key tax levers, such as income tax on rental earnings, National Insurance and welfare, are not devolved, decisions made in Westminster directly influence the financial position of people in Wales, limiting the Welsh Government’s ability to offset or adjust the financial impact of UK-level decisions on landlords or tenants.
Income tax
One of the most significant changes for landlords is the increase in rental income tax scheduled for April 2027 that will affect properties in both England and Wales.
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The basic rate will rise from 20% to 22%.
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The higher rate will increase from 40% to 42%.
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The additional rate will go from 45% to 47%.
The Government has set the rates this time round, but has said it plans to work with the Welsh Government to set their own property income tax rates in the future.
Dividend rates measure
The Government also announced that it will increase the tax rates on dividend income from April next year.
The ordinary rate will rise to 10.75%, the upper rate to 35.75%, while the additional rate will remain at 39.35%. These changes will also increase the tax due on loans and benefits provided to participators.
High-value council tax surcharge
The High-Value Council Tax Surcharge (HVCTS) that will be introduced from April 2028 for properties over £2 million will only apply to properties in England, with Welsh properties unaffected.
Energy efficiency
The Government has confirmed that the £150 Warm Home Discount will continue for around three million low-income households. Alongside this, £1.5 billion has been allocated to the upcoming Warm Homes Plan to tackle fuel poverty, building on the £13.2 billion previously committed at the 2025 Spending Review.
The Warm Homes Plan itself has not yet been published, so further details on exactly how this investment will be delivered are expected in due course.
Our take on the changes
We have made it clear to Government that these changes will increase the pressure on landlords and are likely to result in higher rents, as well as potentially forcing some landlords out of the sector, reducing the supply of homes to rent – with tenants ultimately the losers.
