The Chancellor delivered the Autumn Budget on 28 October 2026. For landlords and property owners in England, the headline is a further increase to income tax on rental profits, on top of the rise already announced last year. Here is a clear, GOV.UK-verified summary of what changed, what stayed the same, and what is already in motion regardless of today’s statement.
Rental Income Tax: Rates Rise Again from April 2027
The most significant change for landlords is another increase to income tax rates on property income.
The Budget 2025 already legislated a 2 percentage point rise. The Autumn Budget 2026 adds a further 2 percentage points on top of that, taking the total increase from the pre-2025 position to 4 percentage points across all bands.
From 6 April 2027, the rates on rental income for individual landlords will be:
| Band | Rate before 2025 | After Budget 2025 | After Budget 2026 |
|---|---|---|---|
| Basic rate | 20% | 22% | 24% |
| Higher rate | 40% | 42% | 44% |
| Additional rate | 45% | 47% | 49% |
The Government says 84% of income taxpayers will not be affected by the combined savings and property income changes. For the landlords who are affected, the numbers are material. On £10,000 of taxable rental profit, a basic-rate taxpayer will pay £400 more in tax per year compared to current rates.
The measure will be enacted through Finance Bill 2026/27. It is announced but not yet law.
Landlords who use a limited company structure are not subject to these income tax rate changes. Corporation tax applies to company profits rather than individual income tax rates.
Business Asset Disposal Relief: Lifetime Limit Cut to £500,000
The lifetime limit for capital gains eligible for Business Asset Disposal Relief (BADR) falls from £1 million to £500,000, also from April 2027.
Standard residential buy-to-let properties do not qualify for BADR, so most landlords will not be directly affected by this change. However, operators of furnished holiday lets and qualifying property businesses that had planned to use the relief on a sale should review their position with an accountant, as the usable allowance has halved.
The Government says three-quarters of BADR claimants will still receive relief on their entire gain at the new limit.
High Value Council Tax Surcharge: New Empty Property Detail
The High Value Council Tax Surcharge, which applies to English residential properties worth £2 million or more, was announced at the Budget 2025 and remains on track for April 2028.
The Budget 2026 confirmed an additional element: properties left empty and unoccupied for 12 months or more will attract a 100% council tax premium on top of the surcharge.
The £2 million threshold was not lowered. Pre-Budget reports of a reduction to £1.5 million were not adopted. The surcharge applies to owners of qualifying properties in England.
Housing Investment
The Budget confirmed the following housing commitments:
An extra £1.5 billion will fund around 10,000 new social and affordable homes in England, prioritised for Social Rent.
The total Social and Affordable Homes Programme investment now exceeds £40 billion over ten years.
The Your First Home equity loan scheme will receive £4.7 billion, with the aim of helping 70,000 households onto the housing ladder. Eligible first-time buyers purchasing a new-build property from a participating developer can access the scheme with a 2.5% deposit, with the Government providing an equity loan of up to 20%. Full scheme details are to follow.
For landlords and property investors, increased supply of social and affordable housing is a long-term consideration, particularly for those operating in or adjacent to the supported housing sector.
What Did Not Change
Stamp Duty Land Tax rates: No changes to rates or thresholds for residential purchases. The 5% surcharge on additional properties remains. The 2% surcharge for non-UK residents remains. The Budget included technical changes to SDLT group relief and rules for assured tenancies, but these are structural and do not affect the standard buy-to-let market.
Capital Gains Tax on residential property: No general CGT rate changes were announced. The 18% and 24% rates on residential property disposals remain in place. The annual exempt amount stays at £3,000. The 60-day reporting and payment window for residential disposals is unchanged.
Income tax thresholds: Thresholds remain frozen until 2030/31. As rents rise and thresholds stay flat, landlords on the basic rate will find themselves pulled into higher bands without earning more in real terms, compounding the effect of the rate increases above.
What Was Already Coming
The following measures were confirmed before today’s Budget and are not new announcements. They are included here because the deadlines are approaching.
Making Tax Digital for Income Tax
MTD is already live for landlords with gross qualifying income above £50,000. From April 2027, the threshold drops to £30,000. Quarterly digital submissions are required through HMRC-approved software. If your gross property income is between £30,000 and £50,000 and you are not yet set up, the window to prepare is closing.
PRS Database Registration
The Private Rented Sector Database launches in England from 15 December 2026, rolling out region by region. Registration costs £65 per property per year.
Self Assessment Payment Reform
From April 2029, taxpayers who currently make payments on account will move to smaller, more regular payments spread through the year. The payment schedule has not been finalised, but landlords who plan around the January lump sum should note this is changing.
Key Dates at a Glance
| What | When |
|---|---|
| Rental income tax rises to 24%, 44%, 49% | 6 April 2027 |
| MTD threshold drops to £30,000 gross income | April 2027 |
| BADR lifetime limit reduced to £500,000 | April 2027 |
| PRS Database registration opens | 15 December 2026 (rolling by region) |
| High Value Council Tax Surcharge | April 2028 |
| Self Assessment payment reform | April 2029 |
What to Do Now
The April 2027 tax changes are the most urgent area to review. The combined effect of two consecutive rate rises means a basic-rate landlord paying 24% instead of 20% from April 2027, and a higher-rate landlord paying 44% instead of 40%. If you have not yet modelled what this means for your portfolio’s net yield, that is the first conversation to have.
The PRS database deadline is also closer than many realise. December 2026 is six weeks away.
If you would like to speak with a specialist property accountant, we are happy to make an introduction. Get in touch with the Coventry Accommodation team.
The information in this blog is based on Budget 2026 documents published on GOV.UK on 28 October 2026. It is for general information only and does not constitute tax advice. Please speak to a qualified accountant for guidance specific to your portfolio.
Sources:
