Guidance
About this guidance
This guidance provides ratepayers and local authorities with information about the transitional relief available, following the non-domestic rates (NDR) revaluation on 1 April 2026. It applies to Wales only and does not replace any existing NDR legislation or any guidance on other reliefs (e.g. small business rates relief).
Billing queries about the relief should be directed to the relevant local authority. Contact details for local authorities can be found on the Business Wales webpage.
Enquiries about this guidance and the related legislation should be sent to the Welsh Government at the following email address: LocalTaxationPolicy@gov.wales
A range of other mandatory and discretionary NDR reliefs are also available to specific types of property or occupiers. Further information about NDR reliefs can be found on our Business Wales webpages.
Introduction
This transitional relief scheme will limit increases in NDR bills, as a result of the revaluation on 1 April 2026. An eligible ratepayer will pay 33% of their additional liability in the first year (2026-27) and 66% in the second year (2027-28), before reaching their full liability in the third year (2028-29).
The transitional relief is fully funded by the Welsh Government and defined in the Non-Domestic Rating (Chargeable Amounts) (Wales) Regulations 2025. The Regulations prescribe rules to be used to calculate the chargeable amount for eligible properties with increased NDR liability of more than £300, as a result of the revaluation. The relief is available to ratepayers on the local list and on the central list.
The Welsh Government is providing £116m over two years to fund this transitional relief, supporting all areas of the tax-base through a consistent and straightforward scheme.
Which properties will benefit from the relief?
Eligibility for transitional relief is not limited to any sector, size, or use of the property (hereditament) within the NDR tax base.
In order to be eligible for transitional relief, the hereditament must:
- have been shown on a local list or the central list on 31 March 2026 (the day before the new lists compiled on 1 April 2026 have effect);
- have an increase in liability (NCA > BL) of more than £300;
- have the same ratepayer on the relevant day as was the ratepayer on 31 March 2026 (if a different person becomes the ratepayer, the relief ceases to apply);
- have been occupied (by the same ratepayer referred to above) on 31 March 2026; and
- not be subject to an apportionment for partially occupied properties under section 44A of the Local Government Finance Act 1988 (the 1988 Act).
How much relief will be available?
Subject to the eligibility criteria set out above, an increase in NDR liability will be phased in over two years. Ratepayers will benefit from transitional relief of 67% of their increased liability in 2026-27 and 34% in 2027-28. In 2028-29, all ratepayers will pay their full bill, subject to any other reliefs they receive.
How will the relief be administered?
For hereditaments on the local rating list, local authorities will automatically adjust bills to apply the transitional relief, where the eligibility criteria are met.
Local authorities are responsible for providing ratepayers with clear and accessible information on the details and administration of the scheme. If, for any reason, an authority is unable to provide this relief to eligible ratepayers from 1 April 2026, consideration should be given to notifying eligible ratepayers that they qualify for the relief and that their bills will be recalculated.
Local authorities will be asked to identify the total amount of relief provided under the scheme in their NDR returns (NDR1 and NDR3).
For hereditaments on the central rating list, the Welsh Government will automatically adjust ratepayers’ bills to apply the transitional relief, where the eligibility criteria are met.
The transitional relief will phase-in increases in NDR liability over a two-year period, by providing ratepayers with relief of 67% of their increased liability in 2026-27 and 34% in 2027-28. By the start of the 2028-29, ratepayers will pay their full bill based on the 2026 revaluation.
If the hereditament meets the eligibility criteria, then the level of transitional relief applicable is determined by the steps set out below. Some worked examples are included in Annex 1.
Determine the base liability
The base liability (BL) for a hereditament is the annualised liability calculated based on the chargeable amount for 31 March 2026. The calculation of BL is made in accordance with section 43 (for occupied local list hereditaments) or 54 (for central list hereditaments) of the 1988 Act, to take account of any statutory reliefs which may apply. There is no calculation for BL based on section 45 of the 1988 Act (for unoccupied local list hereditaments), as hereditaments which are unoccupied on 31 March 2026 are not eligible for transitional relief.
Determine the notional chargeable amount
The notional chargeable amount (NCA) for a hereditament is the annualised liability calculated based on the chargeable amount for 1 April 2026. The calculation of NCA is made in accordance with section 43, 45 or 54 of the 1988 Act, as appropriate, to take account of any statutory reliefs which may apply. Section 45 of the 1988 Act is relevant to the calculation of the NCA, as a hereditament which is unoccupied on or after 1 April 2026 may be eligible for transitional relief, provided it was occupied on 31 March 2026.
The NCA is calculated based on the situation on 1 April 2026. This is used to determine the amount of relief which will apply in each year of the scheme. The NCA is not to be recalculated on 1 April 2027. The effect of calculating the level of relief in this way is that the ratepayer will be required to meet the costs of any increase in liability due to inflation in 2027-28, reflected in any increase in the multiplier. The relief calculated as at 1 April 2026 is deducted from the chargeable amount for the relevant day.
The NCA will only be recalculated if there is a decrease in the chargeable amount (calculated in accordance with section 43, 45 or 54 of the 1988 Act) for a hereditament during the transitional relief period. This could occur, for example, as a consequence of a successful proposal or appeal to reduce the rateable value of the hereditament. In such a case, the NCA will be recalculated using the new chargeable amount from the effective date of the change.
Compare the base liability to the notional chargeable amount
The hereditament is entitled to relief where the increase in liability is more than £300:
NCA > (BL + 300)
Where this condition is satisfied, the maximum amount to be deducted from the chargeable amount is calculated.
Determine the maximum deduction to the chargeable amount
The chargeable amount for NDR is calculated on a daily basis. The maximum daily level of transitional relief which applies for the relevant year is calculated using the formula below.
For year commencing 1 April 2026:
(NCA - BL) x 0.67
365
For year commencing 1 April 2027 (which overlaps with a leap year):
(NCA - BL) x 0.34
366
For the year commencing on or after 1 April 2028, the chargeable amount is reduced by zero through transitional relief, although other reliefs may continue to apply.
Determine the chargeable amount (liability) without transitional relief
Calculate the chargeable amount for the relevant day in accordance with section 43, 45 or 54 of the 1988 Act, as appropriate. This will take account of any mandatory reliefs for which the ratepayer is eligible, before any further deduction to the chargeable amount arising from transitional relief entitlement is applied.
Determine the chargeable amount after transitional relief
Reduce the chargeable amount without transitional relief by the maximum deduction to the chargeable amount, as calculated above.
If applying the maximum deduction to the chargeable amount would result in a negative figure, then the final chargeable amount will be zero. In this scenario, the final amount of relief applied will be lower than the calculated maximum deduction.
If the chargeable amount for an eligible property decreases during the transitional relief period, the entitlement will be recalculated from the effective date of the decrease. This will involve a recalculation of the NCA and transitional relief entitlement, in accordance with the steps set out above.
Is transitional relief applied before or after other types of relief?
The chargeable amount, prior to the application of transitional relief, is determined in accordance with the relevant section of the 1988 Act (e.g. section 43 for occupied local list hereditaments). This means that the other reliefs provided under the relevant section are applied to a ratepayer’s liability before the calculated transitional relief deduction.
Any relief provided using the discretionary powers of local authorities (e.g. under section 47 of the 1988 Act) should be applied after any transitional relief entitlement. This includes any discretionary ‘top-up’ element of a mandatory relief (e.g. any charitable relief above the mandatory 80% awarded by the local authority), as this is awarded under section 47.
The calculation for transitional relief entitlement (i.e. the maximum deduction to the chargeable amount) takes account of any entitlement to mandatory reliefs which may apply. This is a separate step from the calculation of liability before the transitional relief deduction is applied.
If I cease to be the ratepayer for a property during the transitional relief period, do I still get relief for the period I was liable for NDR?
Yes. Transitional relief entitlement is calculated on a daily basis (the same as NDR liability). A ratepayer is entitled to relief for the days they occupy a property, as long as they were also the occupier on 31 March 2026.
If during the transitional relief period I become liable for NDR for a property I did not previously occupy, will I be eligible for the relief?
No. A ratepayer must have been liable for NDR in respect of the property on 31 March 2026, as well as from 1 April 2026, to be eligible for the relief.
Will transitional relief entitlement be recalculated in 2027-28, to account for any increase in liability arising from inflation of the NDR multiplier?
No. Transitional relief entitlement (i.e. the maximum deduction to the chargeable amount) is calculated for both years of the scheme on the basis of the situation on 1 April 2026. It will not be re-calculated on 1 April 2027. The pre-calculated deduction will be applied to a ratepayer’s liability in 2027-28, based on the relevant multiplier.
Entitlement will only be adjusted if the chargeable amount for the property decreases or if the eligible ratepayer ceases to occupy the property.
If the rateable value of my property changes during the transitional relief period, will my entitlement be recalculated?
If the chargeable amount for an eligible property decreases during the transitional relief period, entitlement will be recalculated in respect of the relevant days. NDR liability and transitional relief entitlement are calculated on a daily basis and will be recalculated from the effective date of the decrease, based on the steps set out in this guidance. There will be no recalculation if the chargeable amount for an eligible property increases during the transitional relief period. Changes to the chargeable amount can occur for a variety of reasons.
If my property is unoccupied, but I am still the ratepayer, how will my entitlement be affected?
If your property is occupied on 31 March and 1 April 2026, but becomes unoccupied after 1 April 2026, you may still be entitled to transitional relief. Empty properties may receive full relief from NDR for three months (or six months for industrial properties) after they become unoccupied, so the transitional relief will not apply during any such period. You would continue to benefit from transitional relief if your property remained unoccupied thereafter, or if you resumed occupation (providing that the occupier is the same as the occupier on 31 March 2026).
What can I do if I have reason to believe my relief has been calculated incorrectly?
If you have reason to believe the relief allocated to your property or your NDR bill is incorrect, you should contact your administering local authority.
What should I do if I want to understand my property’s rateable value?
The independent Valuation Office Agency (VOA) is an Executive Agency of HM Revenue and Customs and is responsible for compiling and maintaining rating lists for Wales. If you want to understand how your property’s rateable value was determined or have a query about it, you should contact the VOA.
Annex 1 – Worked Examples
A hereditament’s rateable value increases from £6,000 to £9,000 and Small Business Rates Relief (SBRR) entitlement is reduced. The hereditament is subject to the retail multiplier from 1 April 2026 onwards.
Determine the base liability
On 31 March 2026, the hereditament is eligible for SBRR:
Daily chargeable amount: (£6,000 x 0.568) / (365 x 5,000,000) = £0
Base liability: £0 x 365 = £0
Determine the notional chargeable amount
On 1 April 2026, the hereditament is eligible for SBRR:
Daily chargeable amount: (£9,000 x 0.35) / (365 x 2) = £4.32
Notional chargeable amount: £4.32 x 365 = £1,576.80
Compare the base liability to the notional chargeable amount
Check whether the notional chargeable amount is more than £300 greater than the base liability:
£1,576.80 – £0 = £1,576.80
Determine the maximum deduction to the chargeable amount
For each day in the financial year commencing 1 April 2026:
((£1,576.80 - £0) x 0.67) / 365 = £2.89
For each day in the financial year commencing 1 April 2027:
((£1,576.80 - £0) x 0.34) / 366 = £1.46
Determine the chargeable amount (liability) without transitional relief
The daily chargeable amount for the financial year commencing 1 April 2026 is:
(9,000 x 0.35) / (365 x 2) = £4.32
Determine the chargeable amount after transitional relief
For each day in the financial year commencing 1 April 2026, the daily chargeable amount is reduced to:
£4.32 – £2.89 = £1.43
A hereditament’s rateable value increases from £10,000 to £13,000 and SBRR entitlement is removed. The hereditament is subject to the standard multiplier from 1 April 2026 onwards.
Determine the base liability
On 31 March 2026, the hereditament is eligible for SBRR:
Daily chargeable amount: (£10,000 x 0.568) / (365 x 1.5) = £10.37
Base liability: £10.37 x 365 = £3,785.05
Determine the notional chargeable amount
On 1 April 2026, the hereditament is not eligible for any statutory reliefs:
Daily chargeable amount: (£13,000 x 0.502) / 365 = £17.88
Notional chargeable amount: £17.88 x 365 = £6,526.20
Compare the base liability to the notional chargeable amount
Check whether the notional chargeable amount is more than £300 greater than the base liability:
£6,526.20 – £3,785.05 = £2,741.15
Determine the maximum deduction to the chargeable amount
For each day in the financial year commencing 1 April 2026:
((£6,526.20 – £3,785.05) x 0.67) / 365 = £5.03
For each day in the financial year commencing 1 April 2027:
((£6,526.20 – £3,785.05) x 0.34) / 366 = £2.55
Determine the chargeable amount (liability) without transitional relief
The daily chargeable amount for the financial year commencing 1 April 2026 is:
(13,000 x 0.502) / 365 = £17.88
Determine the chargeable amount after transitional relief
For each day in the financial year commencing 1 April 2026, the daily chargeable amount is reduced to:
£17.88 – £5.03 = £12.85
A hereditament’s rateable value increases from £50,000 to £70,000. The hereditament is subject to the standard multiplier from 1 April 2026 onwards.
Determine the base liability
On 31 March 2026, the hereditament is not eligible for any other statutory reliefs:
Daily chargeable amount: (50,000 x 0.568) / 365 = £77.81
Base liability: £77.81 x 365 = £28,400.65
Determine the notional chargeable amount
On 1 April 2026, the hereditament is not eligible for any other statutory reliefs:
Daily chargeable amount: (70,000 x 0.502) / 365 = £96.27
Notional chargeable amount: £96.27 x 365 = £35,138.55
Compare the base liability to the notional chargeable amount
Check whether the notional chargeable amount is more than £300 greater than the base liability:
£35,138.55 – £28,400.65 = £6,737.90
Determine the maximum deduction to the chargeable amount
For each day in the financial year commencing 1 April 2026:
((£35,138.55 – £28,400.65) x 0.67) / 365 = £12.37
For each day in the financial year commencing 1 April 2027:
((£35,138.55 – £28,400.65) x 0.34) / 366 = £6.26
Determine the chargeable amount (liability) without transitional relief
The daily chargeable amount for the financial year commencing 1 April 2026 is:
(70,000 x 0.502) / 365 = £96.27
Determine the chargeable amount after transitional relief
For each day in the financial year commencing 1 April 2026, the daily chargeable amount is reduced to:
£96.27 – £12.37 = £83.90
A hereditament’s rateable value increases from £100,000 to £120,000. The hereditament is subject to the higher multiplier from 1 April 2026 onwards.
Determine the base liability
On 31 March 2026, the hereditament is not eligible for any other statutory reliefs:
Daily chargeable amount: (100,000 x 0.568) / 365 = £155.62
Base liability: £155.62 x 365 = £56,801.30
Determine the notional chargeable amount
On 1 April 2026, the hereditament is not eligible for any other statutory reliefs:
Daily chargeable amount: (120,000 x 0.515) / 365 = £169.32
Notional chargeable amount: £169.32 x 365 = £61,801.80
Compare the base liability to the notional chargeable amount
Check whether the notional chargeable amount is more than £300 greater than the base liability:
£61,801.80 – £56,801.30 = £5,000.50
Determine the maximum deduction to the chargeable amount
For each day in the financial year commencing 1 April 2026:
((£61,801.80 – £56,801.30) x 0.67) / 365 = £9.18
For each day in the financial year commencing 1 April 2027:
((£61,801.80 – £56,801.30) x 0.34) / 366 = £4.65
Determine the chargeable amount (liability) without transitional relief
The daily chargeable amount for the financial year commencing 1 April 2026 is: (120,000 x 0.515) / 365 = £169.32
Determine the chargeable amount after transitional relief
For each day in the financial year commencing 1 April 2026, the daily chargeable amount is reduced to:
£169.32 – £9.18 = £160.14
A hereditament’s rateable value increases from £15,000 to £25,000. The hereditament is eligible for charitable relief. It is subject to the standard multiplier from 1 April 2026 onwards.
Determine the base liability
On 31 March 2026, the hereditament is eligible for 80% charitable relief:
Daily chargeable amount: (£15,000 x 0.568) / (365 x 5) = £4.67
Base liability: £4.67 x 365 = £1,704.55
Determine the notional chargeable amount
On 1 April 2026, the hereditament is eligible for 80% charitable relief:
Daily chargeable amount: (£25,000 x 0.502) / (365 x 5) = £6.88
Notional chargeable amount: £6.88 x 365 = £2,511.20
Compare the base liability to the notional chargeable amount
Check whether the notional chargeable amount is more than £300 greater than the base liability:
£2,511.20 – £1,704.55 = £806.65
Determine the maximum deduction to the chargeable amount
For each day in the financial year commencing 1 April 2026:
((£2,511.20 – £1,704.55) x 0.67) / 365 = £1.48
For each day in the financial year commencing 1 April 2027:
((£2,511.20 – £1,704.55) x 0.34) / 366 = £0.75
Determine the chargeable amount (liability) without transitional relief
The daily chargeable amount for the financial year commencing 1 April 2026 is:
(25,000 x 0.502) / (365 x 5) = £6.88
Determine the chargeable amount after transitional relief
For each day in the financial year commencing 1 April 2026, the daily chargeable amount is reduced to:
£6.88 – £1.48 = £5.40
This is the daily chargeable amount before any ‘top-up’ charitable relief (i.e. above the mandatory 80%) awarded at the discretion of the local authority is applied.
A hereditament’s rateable value increases from £15,000 to £20,000. The hereditament becomes unoccupied during the year beginning 1 April 2026 and becomes eligible for empty property relief. It is subject to the standard multiplier from 1 April 2026 onwards.
Determine the base liability
On 31 March 2026, the hereditament is occupied and not eligible for any other statutory reliefs:
Daily chargeable amount: (£15,000 x 0.568) / 365 = £23.34
Base liability: £23.34 x 365 = £8,519.10
Determine the notional chargeable amount
On 1 April 2026, the hereditament is occupied and not eligible for any other statutory reliefs:
Daily chargeable amount: £20,000 x 0.502 / 365 = £27.51
Notional chargeable amount: £27.51 x 365 = £10,041.15
Compare the base liability to the notional chargeable amount
Check whether the notional chargeable amount is more than £300 greater than the base liability:
£10,041.15 - £8,519.10 = £1,522.05
Determine the maximum deduction to the chargeable amount
For each day in the financial year commencing 1 April 2026:
((£10,041.15 – £8,519.10) x 0.67) / 365 = £2.79
For each day in the financial year commencing 1 April 2027:
((£10,041.15 – £8,519.10) x 0.34) / 366 = £1.41
Determine the chargeable amount (liability) without transitional relief
For each day in the financial year commencing 1 April 2026 when empty property relief applies, the daily chargeable amount is £0.
For any other day in the financial year commencing 1 April 2026, the daily chargeable amount is:
(20,000 x 0.502) / 365 = £27.51
Determine the chargeable amount after transitional relief
For each day in the financial year commencing 1 April 2026 when empty property relief applies, the daily chargeable amount is:
£0 – £2.79 < £0
As the chargeable amount cannot be negative, it is set to zero.
For any other day in the financial year commencing 1 April 2026, the daily chargeable amount is reduced to:
£27.51 – £2.79 = £24.72