- From 6 April 2027, rental profits will be taxed at 24%, 44% and 49% in England, Wales and Northern Ireland.
- That replaces the 22%, 42% and 47% announced a year earlier, so the total rise on today's rates is four percentage points.
- Mortgage interest relief is a basic-rate tax credit, so it is expected to follow at 24%.
- Homes in England worth £2 million or more face a new council tax surcharge of £2,500 to £7,500 a year from April 2028, paid by owners.
- HMRC has opened a consultation on letting agents reporting landlords' rental income directly.
The new property income tax rates
Property income is getting its own set of tax rates. At Budget 2025 they were set at 22%, 42% and 47% from April 2027. The Autumn Budget 2026 adds two more points. The changes will be legislated in the Finance Bill 2026–27.
| Band | Today | Budget 2025 plan | From 6 Apr 2027 |
|---|---|---|---|
| Basic | 20% | 22% | 24% |
| Higher | 40% | 42% | 44% |
| Additional | 45% | 47% | 49% |
As a simple guide, a basic-rate landlord with £10,000 of taxable rental profit would pay around £400 more a year than today. Scotland and Wales can set their own property income rates.
Other changes for property owners
- High Value Council Tax Surcharge: from April 2028, on homes in England worth £2m or more (April 2026 values). Bands run from £2,500 (£2m to £2.5m) to £7,500 (£5m and above) a year. Owners, not occupiers, pay it.
- Rental income reporting: the government is consulting on letting agents sending HMRC regular reports of landlords' rental income and collecting tax reference numbers.
- Stamp Duty on rent: Stamp Duty Land Tax no longer applies to rent paid under assured tenancies in England, from 1 May 2026.
Key dates
What to do now
- Re-run your 2027–28 numbers at the new rate for your tax band.
- Check your mortgage interest: relief stays a basic-rate credit, so higher-rate landlords feel the rise most.
- Keep records tidy and matching your agent's, as HMRC may soon receive the same figures.
- Speak to a qualified tax adviser before changing ownership or structure.
We give every managed landlord clear monthly statements and a year-end summary, so the figures your accountant needs are always ready, whatever the tax rates.
Property management in London →Questions landlords ask
When do the new rates start?
Is this law yet?
Does it affect landlords with a limited company?
Who pays the council tax surcharge?
- GOV.UK: Budget 2026
- Deloitte TaxScape: Savings and property income tax rate increases
- Propertymark: Budget 2026 raises landlord taxes
- Propertymark: Agents required to step up landlord income reporting
Next update: We'll update this pack when the Finance Bill 2026–27 is published.
General information, not tax advice. Rules and figures change, so check GOV.UK or a qualified adviser before acting.