📌Autumn Budget 2025

Main changes affecting landlords / home-owners

From April 2028, properties in England valued at more than £2 million (in 2026 values) will pay an annual surcharge on top of normal council tax.
The surcharge bands are roughly: £2,500 per year for properties just over £2 m, rising to £7,500 per year for homes worth £5 m or more.
The surcharge will be collected via council tax and paid by the owner, not the occupant.

From April 2027, income from property will be taxed at higher rates than before:
- Basic rate → 22% (up from 20%)
- Higher rate → 42% (up from 40%)
- Additional rate → 47% (up from 45%)
This means landlords will see a 2-percentage-point rise in property income tax across all bands.
The change applies to individual landlords owning property in their own name.

Despite speculation, there were no changes to Stamp Duty Land Tax (SDLT) for property purchases this Budget. Rightmove+1
For landlords considering buying new properties, that means the existing SDLT regime persists (which can already be pricey, especially for second homes or buy-to-let).

The government did not introduce a National Insurance (NI) charge on rental income — despite earlier speculation.

New powers are being given to local authorities or regional mayors to introduce a visitor levy on short-term or holiday lets. That could affect those renting out properties in the short-let/holiday market
The rollout of Making Tax Digital for Income Tax (MTD ITSA) remains scheduled: this may affect how landlords report income (e.g. more digital reporting) from April 2026 onwards.

Reduced rental yields and tighter margins. The 2% tax hike on property income reduces net profit, especially for leveraged landlords (mortgage-heavy portfolios) or those already squeezed by interest-rate costs and previous tax/regulation changes.
Possible rent increases. Many analysts expect landlords to pass on some of the extra tax burden to tenants, which could drive up rents — especially given already tight rental supply.
Pressure on high-value homeowners. Owners of expensive properties (especially in London and the South East) are most likely to be hit by the new surcharge.
Reconsider buy-to-let investments. Given reduced profitability, some landlords may exit the market — especially smaller or marginal-yield investors — leading to potential decline in rental supply over time.
Need to reassess cash flow & long-term viability. Landlords should rework their financial forecasts to account for higher tax bills, potential surcharge, and possibly fewer tax-relief offsets (since property income will be taxed more heavily).

Re-model rental yields using the new tax rates (22/42/47 %) to see if current rents still cover mortgage, maintenance, tax, and net profit.
Check property value (or likely 2026 valuation) — if above £2 million, plan for the annual surcharge starting 2028.
Consider structure of ownership: if holding multiple properties or letting through a company, investigate whether a company structure makes sense (though this has pros and cons).
Review short-term lets / holiday-let plans — if using holiday-let or short-let models, be alert for additional levies.
Stay compliant with tax reporting — be ready for changes in how landlords must report income under MTD ITSA from 2026.

Stay informed and compliant. MAS Letting’s & Management helps landlords adapt to new legislation with hassle-free property management.