If you let property in Wales, the latest housing proposals deserve your attention. This month, the Welsh Government announced plans to restrict the use of no-fault evictions as part of a wider programme that also includes fairer rents, potential rent controls and a Community Right to Buy.
None of these measures is law yet. But that does not mean landlords can afford to ignore these proposals for Welsh eviction reforms. Because any changes to eviction mechanisms could influence rental demand, investment decisions and the long-term value of Welsh Buy-to-Let properties. Whether you are considering selling, incorporating or holding your portfolio, understanding where the law stands today, and what may change next, is essential before making a decision.
This article explains what has been announced to date, whether no-fault evictions in Wales are actually banned, and what the wider package of fairer rents, possible rent controls and a Community Right to Buy could mean for Welsh landlords.
Key Takeaways
- The Welsh Government announced in July 2026 that it plans to restrict no-fault evictions by private landlords, but no legislation has been passed yet and the current rules remain in force
- Landlords in Wales can still recover possession without proving tenant fault by serving a valid section 173 notice under the Renting Homes (Wales) Act 2016
- In most cases, the notice cannot be served within the first six months of the occupation contract and must give the contract-holder at least six months' notice
- Over the current four-year Senedd term, the Welsh Government also plans to introduce legislation on fairer rents (including possible rent controls), a Community Right to Buy, and proposals to give effect to a Right to Adequate Housing
- Selling a Welsh rental property may trigger Capital Gains Tax; for the 2026/27 tax year, residential property gains are generally taxed at 18% for basic rate taxpayers and 24% for higher- and additional rate taxpayers, and any tax due must normally be reported and paid within 60 days of completion
- Transferring a Welsh rental property into a limited company can trigger Land Transaction Tax (LTT), with any LTT generally payable to the Welsh Revenue Authority within 30 days of the effective date of the transaction
What Wales Eviction Reforms Have Been Announced?
The Welsh Government announced in July 2026 that it intends to restrict no-fault evictions by private landlords as part of a wider programme of housing reform. The programme also includes proposals to make rents fairer, introduce possible rent controls, establish a Community Right to Buy and legislate for a Right to Adequate Housing. None of these reforms has become law yet, and the Government has not published legislation to implement the proposed restrictions.
The announcement formed part of the first phase of the Welsh Government's legislative programme, unveiled by First Minister Rhun ap Iorwerth after Plaid Cymru became the largest party in the May 2026 Senedd election. Alongside the housing reforms, the Government also announced plans for a Community Right to Buy, rural proofing legislation and a new Welsh tribunal system.
Are No-Fault Evictions in Wales Banned Yet?
No. As of July 2026, a landlord can still end a standard occupation contract without giving a reason by serving a section 173 notice. The Renting Homes (Wales) Act 2016 replaced assured shorthold tenancies with occupation contracts on 1 December 2022, and section 173 is the mechanism the Government now plans to curtail later in the term.
Two timing rules apply when serving an eviction notice though. A section 173 notice cannot be given during the first six months of the occupation contract, and at least six months' notice must then be given. In practice, that gives a compliant contract-holder around 12 months’ security from the start of the contract.
In short, nothing about your possession rights has changed today. But they might change in the future.
Fairer Rents, Rent Controls & the Community Right to Buy
The biggest commercial unknown is what “fairer rents” means in practice. The Government has not confirmed rent controls, but the language points that way, and the sector has already pointed to the effect controls had on supply in Scotland.
A Community Right to Buy would give registered community groups first refusal when the owner of a valued local asset sells, which matters for landlords in rural and coastal Wales. The detail on qualifying assets and process has not been published, and consultation is expected before any of this becomes law.
What Should Welsh Landlords Do Now: Hold, Sell or Restructure?
There is no single right answer. It depends on your investment goals, tax position and how the proposed Welsh eviction reforms could affect your portfolio. Landlords can hold and adapt to the prospect of longer notice periods and possible rent controls. They can sell and crystallise any capital gains under the current tax rules. Or they can restructure by transferring their properties into a limited company for potential tax and succession planning benefits. Many higher rate taxpayers already consider incorporation because the Section 24 mortgage interest relief restrictions, introduced by the Finance (No. 2) Act 2015 and now contained in sections 272A to 274C of the Income Tax (Trading and Other Income) Act 2005, have reduced the tax efficiency of owning residential property personally.
The restructure route has an important Welsh-specific consideration though. Transferring a property into a limited company is a land transaction, so Land Transaction Tax (LTT) applies, as provided by the Land Transaction Tax and Anti-Avoidance of Devolved Taxes (Wales) Act 2017. Any LTT due must be paid, and the transaction reported, to the Welsh Revenue Authority within 30 days of the effective date. Depending on the value of the portfolio, the upfront LTT bill can run into five figures, making professional tax advice essential before proceeding.
Worked Example: A Cardiff Landlord Facing A Difficult Choice
A landlord who recently contacted us illustrates the decision between holding, selling and restructuring well. He is in his early 60s, has self-managed three Buy-to-Let properties around Cardiff for almost 20 years and pays Income Tax at the higher rate. One of his tenants has just given notice, meaning he will soon have a property back with vacant possession for the first time in years.
His original plan was to carry out a few improvements and find a new tenant for the property. However, the Welsh Government's announcement that it intends to restrict no-fault evictions made him pause. Although no legislation has been passed and the current possession rules remain unchanged, he is now questioning whether to continue expanding his portfolio, begin winding it down or restructure it before any future reforms take effect.
Properties Around Cardiff | Bought | Cost | Estimated Value (2026) | Latent Gain | Current Position |
|---|---|---|---|---|---|
Cathays Terrace | 2007 | £119,000 | £205,000 | £86,000 | Mortgage-free, tenant leaving |
Grangetown Flat | 2014 | £142,000 | £198,000 | £56,000 | Small mortgage |
Canton Terrace | 2019 | £205,000 | £268,000 | £63,000 | Mortgaged |
He is considering three options, each with different tax consequences.
Option 1: Sell Only the Vacant Property
The unrealised gain is £86,000. After deducting the 2026/27 Annual Exempt Amount of £3,000, £83,000 remains chargeable. Assuming the entire gain falls within the higher Capital Gains Tax (CGT) rate for residential property, the CGT liability would be £19,920. As required by Schedule 2 to the Finance Act 2019, the disposal must generally be reported and any CGT paid within 60 days of completion.
Option 2: Sell All Three Properties & Exit the Market
The combined unrealised gain is £205,000. After one £3,000 Annual Exempt Amount, £202,000 would be chargeable, producing a CGT liability of approximately £48,480 if taxed entirely at 24%. This provides a clean exit but crystallises the gains in a single tax year.
Option 3: Transfer the Portfolio Into a Limited Company
Capital Gains Tax may be deferred using incorporation relief under section 162 of the Taxation of Chargeable Gains Act 1992, provided the statutory conditions are met. In particular, the letting activity must amount to a genuine business rather than passive investment, which depends on the facts of each case. In addition, for incorporations from 6 April 2026, incorporation relief must be claimed on the tax return rather than applying automatically. The transfer is also a land transaction, meaning Land Transaction Tax may be payable under the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017, with any tax generally due to the Welsh Revenue Authority within 30 days.
The proposed eviction reforms are not the reason he must act today. They have not yet become law. Instead, they have prompted him to reassess a decision he was already about to make. Whether he should hold, sell or restructure depends on his retirement plans, tax position, long-term investment goals and whether incorporation relief is available.
Conclusion
If you own rental property in Wales, the reforms do not force you to act this week, but they change the arithmetic behind holding, selling and incorporating, and each route carries a different tax bill. Get the possession timing wrong and you lose flexibility, get the tax wrong on a sale or a transfer into a company and you can overpay by tens of thousands.
Because Welsh property sits under LTT, and because section 162 relief is neither automatic nor guaranteed, this is a case for running your real numbers before you commit rather than acting on the headlines about no-fault evictions in Wales.
Need Help?
Work Out Your Position Before You Decide!
If you're considering incorporating a Welsh rental property, understanding how LTT works is essential. We model your options and assess how you can claim incorporation relief.
FAQs
Not yet. In July 2026, the Welsh Government said it will restrict no-fault evictions during the four-year term of this Senedd, but section 173 of the Renting Homes (Wales) Act 2016 still permits no-fault possession today.
It is the notice a landlord serves to end a standard occupation contract in Wales without giving a reason. It cannot be given in the first six months of the contract, and at least six months' notice must then be given.
It is not confirmed. The Government has committed to making rents fairer, which may or may not mean formal controls. No mechanism or timetable has been published, and consultation is expected first.
Yes. LTT is paid to the Welsh Revenue Authority within 30 days of completion, and transfers into a connected company are normally charged at the higher residential rates on market value.
That depends on your gain, your income and your plans. Selling crystallises CGT, now at 18% or 24%, while holding or incorporating changes the numbers considerably. Model the sale and the restructure side by side before you decide.
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