The Welsh Government has confirmed it will bring forward legislation to postpone the planned council tax revaluation until the next Senedd term, citing mounting pressure on public finances and concerns about the impact on households.
Speaking in the Senedd, ministers said the decision follows extensive analysis carried out over the summer into both the cost of implementing the revaluation and the potential impact on taxpayers across Wales.
The planned reform would have updated council tax bands, which are currently based on property values dating back to 2003. Research undertaken by the Welsh Government suggested around 25% of households could have moved into a higher council tax band, while a further quarter may have seen their tax bill fall. Around half of properties were expected to experience little or no change.
However, supporting households facing significant increases would have come at a considerable cost. Government estimates indicate mitigation measures for those affected could have cost up to £80 million in the first year alone.
Welsh Cabinet Minister for Finance, Elin Jones, said:
"That's a serious amount of money at a genuinely difficult time for public finances, with real pressures this year, especially in the NHS, and less funding coming from the UK government going forward.
“Every pound has to go further right now, and we're focused on bringing down NHS waiting lists, helping families with the cost of childcare, creating jobs, and raising educational standards.
“It wouldn't have been fair to press ahead with this without fully supporting households, particularly at a time when household budgets are under significant pressure.
“We know the current system is unfair. Some people are still paying council tax based on what their home was worth over twenty years ago. That hasn't changed, and neither has our view.
“This isn't about giving up on council tax reform or retreating from fairness. It's a practical call about timing and what we must prioritise. We'll spend this time looking at other, more targeted ways to improve the system that don't come with the same price tag, and we welcome any ideas."
The Welsh Government maintains that reform remains necessary, acknowledging longstanding concerns that the current system no longer reflects modern property values. However, ministers argue that current fiscal pressures, particularly within health services and other frontline public services, mean resources must be directed towards immediate priorities.
Legislation to formally defer the council tax revaluation will be introduced next month.
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