Could the Autumn Budget 2026, to be delivered on 28 October 2026, make owning, selling or letting property more expensive?
That is the question landlords and property investors are asking as speculation grows around possible changes to Capital Gains Tax, Stamp Duty Land Tax and National Insurance on rental income.
But how much of this is actually happening? Here’s what has actually been confirmed, what is still only a rumour and which changes could genuinely raise your tax bill.
Key Takeaways
- The Autumn Budget 2026 is confirmed for Wednesday, 28 October 2026, and will be Chancellor John Healey’s first Budget
- Tax rates on property income will rise by 2 percentage points to 22%, 42% and 47% from 6 April 2027, following legislation that has already been passed
- A new “Mansion Tax” on homes worth £2 million or more will take effect in April 2028
- A higher Capital Gains Tax (CGT), a national property tax to replace Stamp Duty, and National Insurance (NI) on rental income have all been rumoured, but none are currently part of government policy
- For 2026/27, residential property gains remain subject to CGT rates of 18% and 24%, while the SDLT surcharge on additional dwellings is 5%
What Property Taxes Are Already Confirmed?
Two property tax changes are already on the books and do not form part of the Autumn Budget 2026. Both were announced by the previous Government at the Autumn Budget 2025.
The first is a 2 percentage-point increase in the Income Tax rates, to apply to property income from 6 April 2027. The new rates will be 22% for basic rate taxpayers, 42% for higher rate taxpayers and 47% for additional rate taxpayers in England, Wales and Northern Ireland. The measure has already been legislated for, so these increases are not something the new Chancellor needs to announce or confirm in October.
The second is the High Value Council Tax Surcharge (Mansion Tax), which is due to take effect from April 2028. The surcharge will apply to owners of residential properties in England worth £2 million or more, with annual charges ranging from £2,500 to £7,500 depending on the property's value. The owner, rather than the occupier, will be liable for the charge.
However, while the surcharge itself has been confirmed, its detailed design is still being worked through. The Government consulted on its valuation, billing, exemptions, reliefs and other implementation details earlier this year.
Worked Example: Does Incorporation Make Sense for a Landlord with £24,000 of Rental Profit?
Consider a landlord who lets a property in England. The property, which he owns personally, generates £24,000 of taxable property profit a year after allowable expenses. He is already a higher-rate taxpayer, so from 6 April 2027, that property profit will be subject to the new 42% property income tax rate.
That gives him a property income tax liability of:
£24,000 × 42% = £10,080
Now compare this with the same £24,000 of taxable profit earned by a limited company. Assuming the company qualifies for the 19% small profits Corporation Tax rate, its Corporation Tax liability would be:
£24,000 × 19% = £4,560
Header | Owned Personally | Owned Through a Company |
|---|---|---|
Taxable Property Profit | £24,000 | £24,000 |
Tax Rate | 42% | 19% |
Tax on Profit | £10,080 | £4,560 |
Profit Remaining After this Tax | £13,920 | £19,440 |
At first glance, the company appears to leave the landlord with £5,520 more - £19,440 after Corporation Tax compared with £13,920 after Income Tax. But the important thing to understand is that the £19,440 is not the landlord's money. It remains in the company.
The £13,920, by contrast, is already in the landlord's hands. To make a fair comparison, we therefore need to assume that the company distributes its £19,440 to the landlord as a dividend and calculate the Dividend Tax due on that payment.
What Happens When the Landlord Takes the Money Out of the Company?
From 6 April 2026, the higher rate of Dividend Tax is 35.75%, and the annual Dividend Allowance is £500. HMRC's published rates confirm both figures.
Assuming the landlord has already used his other Income Tax allowances and is taxed at the higher dividend rate, the calculation is approximately:
Company profit after Corporation Tax = £19,440
After Deducting £500 Dividend Allowance = £18,940
Dividend Tax at 35.75% = £6,767
Cash Received By the Landlord = £12,673
The comparison now looks very different:
Header | Owned Personally | Owned Through a Company |
|---|---|---|
Profit After First Layer of Tax | £13,920 | £19,440 |
Dividend Tax | - | £6,767 |
Cash Ultimately Received by Landlord | £13,920 | £12,673 |
Going by these figures, the landlord will have around £1,247 less cash in hand by using a company.
So, on an unmortgaged property producing £24,000 of taxable profit, incorporation does not produce a tax saving if the landlord intends to extract all of the profit for personal use.
But What If the Landlord Leaves the Money in the Company?
Then the answer changes.
If the landlord leaves the £19,440 in the company, he does not pay Dividend Tax. The company has the full £19,440 available to retain or reinvest, compared with £13,920 available after tax under personal ownership.
This can make incorporation more attractive for landlords who want to:
- Retain rental profits within the company
- Build deposits for additional properties
- Fund other investments
- Grow a portfolio without withdrawing all of the rental profit personally each year
So now, the key question is not, “Which structure has the lower tax rate?” It is, “Does the landlord need the profit personally or can it stay in the company?”
What About a Mortgaged Property?
The £24,000 example above assumes the property is unmortgaged. Add a mortgage and the comparison changes completely.
An individual landlord cannot simply deduct residential mortgage interest from rental income when calculating taxable property profit. Instead, the landlord gets a 20% tax credit.
For example, suppose the property generates £24,000 of rental profit before £10,000 of mortgage interest.
The landlord still pays tax on the full £24,000:
£24,000 × 42% = £10,080
They then get a tax reduction equal to 20% of the £10,000 mortgage interest:
£10,000 × 20% = £2,000
Their property income tax therefore becomes:
£10,080 − £2,000 = £8,080
Meanwhile, a company can generally deduct qualifying mortgage interest when calculating its taxable profit.
So, if the company earns the same £24,000 before £10,000 of mortgage interest, it pays Corporation Tax on £14,000 only:
£24,000 − £10,000 = £14,000
At 19% Corporation Tax:
£14,000 × 19% = £2,660
The company therefore retains £11,340 after Corporation Tax.
This is where borrowing can make incorporation more attractive. An individual landlord gets only a 20% tax credit for qualifying residential mortgage interest, while a company can generally deduct the full mortgage interest when calculating its taxable profit.
But the actual saving will depend on the amount of mortgage interest, the landlord's other income, the company's Corporation Tax position and whether the company retains or distributes its profits.
The Real Incorporation Question
There is no universal answer to whether incorporation saves tax.
For an unmortgaged property where the landlord needs all the rental profit personally, the numbers above suggest personal ownership may be best. For a landlord who can retain profits and reinvest them, the company can provide a valuable tax deferral and leave more capital inside the business. And where the property is substantially mortgaged, the mortgage interest rules can make incorporation more attractive.
That is why the right comparison is not simply the tax paid by an individual against the Corporation Tax paid by a company. It is the whole journey from rental profit to the money the landlord ultimately wants to use.
Will Capital Gains Tax (CGT) Rise?
No increase in Capital Gains Tax (CGT) has been announced thus far. However, there is growing speculation that the Government could align CGT rates with those of the Income Tax.
For 2026/27, residential property gains are taxed at 18% where the gain falls within the basic rate band and 24% above it, after taking account of the individual’s available allowances and reliefs. Meanwhile, the annual exempt amount is £3,000. These are the rates currently in force and there is no confirmed change for the 2026 Budget.
There has also been speculation about Private Residence Relief, which can exempt qualifying gains on the sale of your main home. Section 222 of the Taxation of Chargeable Gains Act 1992 provides the relief, and proposals have reportedly included limiting it for higher-value properties. But again, nothing of this kind has been formally announced or confirmed.
Is Stamp Duty About to be Scrapped?
No. There have long been talks of replacing Stamp Duty Land Tax (SDLT) with an annual, proportional property tax. But these talks have not yielded any concrete policy. The present Prime Minister has also publicly ruled out scrapping Stamp Duty. For now, the existing SDLT rules remain in place.
So, despite the headlines about a possible replacement property tax, there is currently no confirmed plan to abolish SDLT in the 2026 Budget. If you are planning to buy, your SDLT liability should therefore be calculated under the rules currently in force rather than on the assumption that Stamp Duty will be abolished after October's Budget.
Could Landlords Be Charged National Insurance on Rent?
There is currently no confirmed plan to charge National Insurance on rental income. The idea has been raised by think tanks as a potential way to raise revenue, with one estimate putting the potential yield at around £3.2 billion a year. It is not Government policy and no legislation has been announced to introduce such a charge.
Under the current rules, rental income is treated as investment income and does not attract National Insurance. So, landlords do not currently pay National Insurance on their rental profits.
Conclusion
If you own, let or plan to sell property, there is a lot of noise around the Autumn Budget 2026. If you are a landlord or a property investor, you need to separate fact from fiction and understand what’s been confirmed and what hasn’t.
Two measures – higher property income taxes and the mansion tax – are confirmed and will come into force next year. Everything else is worth keeping an eye on but not worth worrying about.
Read Our Complete Guide
We hope this article offered a useful glimpse into what the Autumn Budget 2026 could have in store for you. But one article can only cover so much. If you want to dive deep into every detail that has been confirmed so far and know if October could bring higher taxes for you, read our complete guide by clicking the button below.
FAQs
The Autumn Budget 2026 will take place on Wednesday, 28 October 2026. Chancellor John Healey confirmed the date on 31 July 2026.
Not under the current rules. A qualifying main residence can benefit from Private Residence Relief, which can exempt all or part of the gain from Capital Gains Tax when you sell it.
There has been speculation about changes to Capital Gains Tax and Private Residence Relief, but no change making ordinary sales of qualifying main homes subject to CGT has been announced or legislated for yet.
No. There is currently no confirmed plan to abolish Stamp Duty Land Tax (SDLT). SDLT remains in force in England and Northern Ireland.
Non-resident landlords should pay particular attention to Making Tax Digital, the Non-Resident Landlord Scheme and the tax treatment of UK property disposals.
Not necessarily. There is no confirmed tax change that makes incorporating before the Autumn Budget 2026 an advantage. However, the increase in property income tax rates from April 2027 means incorporation is worth reviewing now, particularly for landlords who plan to retain rental profits in a company and reinvest them.
Want more news from UKPA?
- Will the Autumn Budget 2026 Raise Your Tax Bill? What’s Confirmed & What’s Not - 8 September 2026
- The Third-Party Data Behind HMRC’s Nudge Letters to Landlords - 25 August 2026
- Autumn Budget 2026 Timeline: The Key Dates to Watch - 21 August 2026
