Will Landlord Taxes Rise in Autumn Budget 2026?

From 6 April 2027, property income tax rates will rise to 22%, 42% and 47%, so many individual landlords will keep less of their rental profit.

The October Budget could still bring more changes. If you own a buy-to-let, second home or property portfolio, this is a good time to look at how your properties are owned and whether your current structure still makes sense.

The Autumn Budget 2026 is due on Wednesday 28 October 2026, and landlords will want to keep a close eye on it. It will be John Healey’s first Budget as Chancellor and the first under Prime Minister Andy Burnham.

The government has said it will stick to its fiscal rules, which limits how much it can borrow. In practice, that means the Chancellor may have to look for other ways to raise money or control spending.

For landlords, that matters because property taxes are often part of the wider Budget discussion. Any changes could affect how much tax you pay on rental profits, what it costs to buy another property, or the tax bill when you eventually sell.

The three main areas to watch are tax on rental income, Stamp Duty Land Tax and Capital Gains Tax. Each could affect landlords in a different way, so here is where things currently stand and what may be worth watching ahead of the Budget.

Learn more about Andy Burnham's Tax Plan: Andy Burnham's Property Tax Policies Detail Explanation

Which Property Taxes are Already Confirmed? 

These are done deals, all carried over from the November 2025 Budget. 

Rental income tax is going up. From April 2027, individual landlords pay 2 points more, so the rates become 22%, 42% and 47%. Own the property through a company and this one skips you, because a company pays corporation tax instead. That single quirk is why our phones keep ringing with the same question: is it time to incorporate? 

Next, the "mansion tax", officially the High Value Council Tax Surcharge. From April 2028, English homes worth £2 million or more pay an extra £2,500 to £7,500 a year on top of their council tax, capped at £7,500 for the priciest. 

The surcharge is confirmed, but the details are not. The Government has yet to finalise how properties will be valued or what reliefs will apply. If your property is close to the £2 million threshold, the valuation rules could be just as important as the rate itself.

The third one is the sly one. Income tax thresholds stay frozen until 2030/31. Rents climb, the bands stay put, and landlords quietly slide into higher-rate tax while every rate on paper stays exactly the same. 

What has Burnham Ruled Out? 

What is Still Just Speculation? 

The changes are more likely to squeeze returns gradually than cause one big tax hit. From 2027, landlords will pay more tax on rental income, while owners of higher-value homes could face an extra annual charge from 2028.

Higher Tax on Rental Income from April 2027 

From 6 April 2027, property income tax rates will rise from 20%, 40% and 45% to 22%, 42% and 47%. Finance-cost relief for unincorporated landlords will also increase to 22%. 

For a landlord with £20,000 of property income taxed entirely at the higher rate:

If £60,000 of property income is taxed on the same basis, the additional tax would be £1,200 a year. The actual impact will depend on your wider income, finance costs and available reliefs. 

Higher personal tax rates can make incorporation look more attractive. But simply comparing 42% personal tax with 19% corporation tax can be misleading.

What really matters is how much money you are left with after all the taxes are paid and the profits reach your bank account.

Does Incorporation Save Tax on £24,000 of Rental Profit?

Suppose your property makes £24,000 of taxable profit a year. If you own it personally and pay tax at 42%, your tax bill would be: £24,000 × 42% = £10,080

That leaves you with £13,920.

If the same £24,000 is earned through a company paying 19% Corporation Tax, the company would pay: £24,000 × 19% = £4,560

That leaves £19,440 in the company.

What if you want to take the money out?

If you pay that profit to yourself as a dividend, another tax charge may apply.

Using a £500 Dividend Allowance and a 35.75% higher dividend rate:

• Profit after Corporation Tax: £19,440
• Dividend Tax: around £6,767
• Cash left for you: £12,673

That is roughly £1,247 less than owning the property personally.

So if the property has no mortgage and you need to take all the profit out each year, incorporation may not actually save you tax.

What if you leave the profit in the company?

This is where company ownership can start to make more sense.

If you leave the £19,440 in the company, there is no immediate Dividend Tax. That gives you more money to put towards another deposit, invest in another property or grow the portfolio.

So the real question is not simply “Which tax rate is lower?” It is: “Do I need the money personally, or can I leave it in the company to reinvest?”

What if there is a mortgage?

A mortgage can change the picture quite a lot.

Individual landlords do not get the same treatment for residential mortgage interest as companies. A company can generally deduct qualifying interest before Corporation Tax is calculated, which can make incorporation more attractive where borrowing is high.

For example, if you have £24,000 of profit before £10,000 of mortgage interest, the company may only pay Corporation Tax on £14,000.

That can make a real difference.

The main point is that incorporation is not automatically better or worse. It depends on your mortgage, your other income, how much profit you want to withdraw and whether you plan to reinvest.

Capital Gains Tax When You Sell 

Where CGT is due on a UK residential property disposal, UK residents generally have 60 days from completion to report the disposal and pay the tax. 

There has also been speculation about Private Residence Relief, the relief under section 222 of the Taxation of Chargeable Gains Act 1992 that exempts qualifying gains on your main home. Reports have suggested it could be restricted for higher-value properties. Nothing has been announced or confirmed.

High Value Council Tax Surcharge from April 2028 

Under the current plans, the annual charge starts at £2,500 for properties worth £2 million to £2.5 million and rises to £7,500 for properties worth more than £5 million. 

There is currently no official confirmation that the threshold will fall to £1.5 million. Until the Government announces otherwise, investors should plan around the confirmed £2 million starting point and treat reports of a lower threshold as speculation. 

Almost certainly not. Burnham has already ruled out scrapping or replacing stamp duty this time round, and no rate changes have been hinted at. The 5% surcharge on additional properties stays, and so does the 2% one for overseas buyers. There is longer-term noise about overhauling property tax, but none of it lands on 28 October.

There has also been talk for years about replacing Stamp Duty with an annual property tax based on a property’s value. So far, though, it has never moved beyond discussion.

If you are buying now, base your numbers on the rules that actually apply today rather than assuming the system will change after the October Budget.

Will Capital Gains Tax Rise for Landlords? 

Two changes are already confirmed: higher tax on rental income from 6 April 2027 and the High Value Council Tax Surcharge from April 2028. Everything else remains speculation until the Chancellor speaks on 28 October.

The bigger question is what you should do before then. Incorporating, selling or changing ownership can all produce very different results depending on your mortgage, other income and whether you need the rental profits personally.

If you want to know what makes sense for your own portfolio, the numbers need to be worked through properly.