Landlords will pay income tax on rental profits at 24%, 44% and 49% from 6 April 2027, after the Budget on 28 October added a further two percentage points to every band. The increase comes on top of the two-point rise announced in the November 2025 Budget, so a higher-rate landlord who pays 40% on rental profits today will pay 44% from April 2027.
For buyers and sellers, the Budget was quieter. Stamp duty rates and surcharges, capital gains tax rates and inheritance tax thresholds are unchanged, and the High Value Council Tax Surcharge on homes worth £2 million or more goes ahead as planned from April 2028.
Landlords: a second rise in rental income tax
The government's overview of tax measures confirms property income rates of 24% (basic), 44% (higher) and 49% (additional) from 6 April 2027 in England, Wales and Northern Ireland; Scotland and Wales can set their own rates. Savings income rises by the same amount. HM Treasury says 84% of taxpayers will see no increase in their tax bill.
On a rental profit of £30,000 taxed entirely at the higher rate, the tax rises from £12,000 to £13,200 a year. The detail of how the new rates apply to the relief for mortgage interest, and to income from property overseas, had not been published in full on Budget day, and landlords should check both once HMRC's guidance appears.
Propertymark, the professional body for agents, was critical. Its head of policy and campaigns, Timothy Douglas, said the rise "is a further disincentive to potential landlords from entering the market". Coming after the Renters' Rights Act and with tighter energy standards due by 2030, the change adds to the cost of letting rather than to its rules.
Homes worth £2 million or more
The High Value Council Tax Surcharge applies in England from April 2028 to homes valued at £2 million or more, based on April 2026 values. Owners, not occupiers, will pay it, on top of normal council tax. As reported by Propertymark, the annual charges are:
- £2,500 for homes valued at £2 million to £2.5 million;
- £3,500 for £2.5 million to £3.5 million;
- £5,000 for £3.5 million to £5 million;
- £7,500 for £5 million and above.
Draft valuation bands are due in autumn 2027, with first bills in March 2028, and owners will be able to challenge their band. Homes left substantially unfurnished and unoccupied for at least 12 months face a 100% council tax premium. For owners near £2 million, the valuation date of April 2026 matters more than any price movement since.
First-time buyers: equity loans return
The new Your First Home scheme in England, worth £4.7 billion, offers first-time buyers an equity loan of 20% of the price, interest-free for five years, with a deposit of between 2.5% and 15%. Household income is capped at £140,000 in London and £110,000 elsewhere, and price caps are set by local area, with a maximum of £650,000 in inner London and £500,000 in outer London. Pre-registration opens by the end of December 2026, applications from February 2027 and the first loans from April 2027. The government expects it to help around 70,000 households.
A new First Time Buyer ISA will replace the Lifetime ISA for new savers from April 2029, with a 25% bonus, capped at £20,000, on a first home worth up to £450,000. From 29 October, the charge for using a Lifetime ISA towards a home above £450,000 falls from 25% to 20%.
What did not change
- Stamp duty. Residential rates and the 5% and 2% surcharges are unchanged; the Budget's stamp duty measures were technical.
- Capital gains tax. The rates on residential property stay at 18% and 24%, and the annual exempt amount at £3,000.
- Inheritance tax. The nil-rate band stays at £325,000 and the residence nil-rate band at £175,000.
For sellers, the absence of further property tax changes removes one source of uncertainty that had held some decisions back this autumn. For landlords, the question is now one of numbers: what each property earns after tax from April 2027, and whether the rent reflects it. None of this is tax advice; an accountant should confirm the effect on your own position.
Dolce Vita handles sales and lettings across the UK from Mayfair, and helps clients buy abroad through partner agencies. If you would like to know what your property should let or sell for after the Budget, Request a lettings valuation; we acknowledge the same working day and return a written valuation within 24 to 48 hours.
Chris Dawson, Co-Founder
Sources: HM Treasury, "Budget 2026: breathing space for today, hope for the future", 28 October 2026. HM Treasury, Budget 2026: overview of tax legislation and rates (paragraphs 1.2, 1.22, 2.3 and 2.4, and Annex A), 28 October 2026. HM Treasury, "Changes to tax rates for property, savings and dividend income", 26 November 2025. Propertymark, "Budget 2026 raises landlord taxes as new support targets first-time buyers", 28 October 2026, including comment by Timothy Douglas. LBC, "What support has been announced for first-time buyers in the Budget?", 28 October 2026.