If you own a rental property personally, profits earned will be subject to higher property income tax rates, with a 2% rise across the basic, higher and additional rate bands from April 2027.

If you sell a rental property, the rates of capital gains tax remain unchanged. The widely anticipated introduction of a ‘mansion tax’ was announced with owners of properties worth more than £2 million subject to a minimum additional annual council tax surcharge of £2,500 from April 2028.

From 6 April 2027, the government will create separate income tax rates for property income and will increase the income tax rates on savings income as follows:

		Property income* (2027/28)	Savings income (2027/28)
Basic Rate	£1 – £37,700	22%	22%
Higher Rate	£37,701 – £125,140	42%	42%
Additional Rate	Over £125,140	47%	47%

*The new property income tax rates will apply to taxpayers in England and Northern Ireland. The Scottish and Welsh Governments will have powers to set property tax rates in those jurisdictions.

You will continue to be taxed at 0% within your personal savings allowance and dividend allowance. The savings allowance continues to be set at £1,000 for a basic rate taxpayer. It is £500 for a higher rate taxpayer and not offered to additional rate taxpayers. The dividend allowance continues to be set at £500.

Besides the new property income tax rates detailed in the income tax section, another change affecting property is the introduction of a high value council tax surcharge, otherwise known as the ‘mansion tax’. The surcharge will be in addition to existing council tax and will be applied to properties with a value over £2 million.

The mansion tax will range from £2,500 to £7,500 depending on the property’s value. Properties will be valued before the introduction of the tax. The mansion tax is applied to the homeowner and not the council tax payer.

Both of these measures will mean an increase in costs for landlords. This will likely increase rents for tenants.
If you are a landlord or a tenant and are concerned about either of these increases, please contact us to discuss your options.

If you are planning to purchase residential property in England or Northern Ireland, the good news is that there were no
changes to stamp duty land tax (SDLT) announced in the Autumn Budget. The main threshold above which you start to pay SDLT remains at £125,000. You will still pay the higher rate of SDLT on additional dwellings you buy such as second homes.

If you are a first-time buyer, you are still eligible for additional relief from SDLT on your property purchase. No SDLT is payable up to £300,000 for first-time buyers. 5% SDLT is payable on properties between £300,000 and £500,000.

If you have properties in your portfolio and would like some clarification from our team, please get in touch.