The Plaid Cymru Welsh Government has delayed plans to reform council tax in Wales until the next Senedd term, citing the cost of implementation and pressure on household budgets.
Finance minister Elin Jones announced the deferral in the Senedd on Tuesday, five months into the new term. The plans, initially proposed in 2022, would have revalued all 1.5 million properties in Wales and created more bands with higher rates for the most expensive homes. The proposal was expected to cut council tax for 800,000 homes, while 470,000 could have seen increases.
Background of the revaluation plans
Wales last revalued homes for council tax in 2003, following a backlash that saw about a third of homes moved into higher tax bands. England subsequently delayed its own revaluation plans and has still not carried out a full revaluation, with council tax there based on property valuations from 1991.
Under former first minister Mark Drakeford, the then-Labour Welsh Government had argued that the bands used to determine bills were nearly 20 years out of date and no longer reflected current house values. The amount charged for band I properties is currently three and a half times that of band A, yet homes in the top band could be worth at least nine times as much as those in the bottom band.
Previous delays and political fallout
The 2024 revaluation was postponed by then-finance minister Rebecca Evans, who said people had told the government they wanted changes to be slower and less drastic. Reforms were instead planned for 2028. That delay was one of the reasons cited for Plaid Cymru pulling out of its cooperation deal with Labour that year.
At the time, Plaid leader Rhun ap Iorwerth said: "I am also concerned by the emerging approach of the government in relation to some elements of the co-operation agreement, including the decision to delay action in supporting the poorest families in our communities, as evidenced most recently by the decision to delay council tax reform."
Reasons for the latest deferral
Speaking in the Senedd, Ms Jones said the decision follows detailed work over the summer to assess the costs of implementation and the impact of updating council tax bands, which remain based on property values from 2003. For some households facing an increase, it could have meant paying hundreds of pounds more a year, and supporting those households responsibly could have cost up to £80m in the first year alone.
"This government's commitment to a fairer council tax system has not changed. We recognise the arguments for updating the system, as we did last term, and we recognise the view that we need to explore how council tax can better reflect current economic conditions in Wales," she said.
"If we were to implement a change of this scale responsibly then I believe as a government we must again provide financial support to mitigate the impacts for households moving up council tax bands. We cannot risk introducing new unfairness into the system, particularly at a time when household budgets are under significant pressure."
She said any temporary relief would cost £80m in 2028-29. She added that Plaid's approach to government "requires us to ask not simply whether revaluation is desirable in principle but whether proceeding represents the best use of the resources available to us at this time".
"I believe the right approach is to pause the 2028 revaluation plans and bring forward legislation next month to defer it until the next Senedd term. A revaluation could not be guaranteed to be seamlessly delivered without significant transitional relief, and funding for such relief is not affordable in this difficult public finance climate," her written statement said.
Ms Jones said the time will be spent looking at "practical, targeted measures" to improve the system. She accepted there would be some who would be disappointed by the further deferral.
A vote on the proposal will go to the Senedd next month, when independent analysis about the impact of revaluation is expected. A spokesman for Reform UK, which wants a cap on council tax of 5% or for voters to get their say, said: "We welcome any pause to household bill increases; kicking this into the long grass and breaking their manifesto pledge provides no certainty for households worried about rising council tax bills."
