Budget 2026: What Changed for Landlords

The Budget on 28 October 2026 announced a further 2 points on the tax on rental profit from 6 April 2027. The property income rates for 2027 to 2028 go to 24%, 44% and 49%, up from the 22%, 42% and 47% already in the Finance Act 2026. The mortgage interest reduction (Section 24) is tied to the property basic rate, so it goes to 24% with it.

Stamp Duty, Capital Gains Tax, the personal allowance and the Making Tax Digital thresholds stay as they were, and the rates for the current tax year, 2026 to 2027, on rental profit, gains and property purchases do not move. A higher rate landlord with £20,000 of rental profit and £10,000 of mortgage interest pays £6,400 on the let in 2027 to 2028 at the announced rates: £200 more than under the Finance Act 2026, and £400 more than this year.

This guide sets out each figure a landlord in England works with, as it stood the day before the Budget and as the Budget papers leave it, with the date each change starts and the paragraph it comes from. Unless a line says otherwise, a change here is announced, not yet law, and most go into the Finance Bill 2026-27. It explains the rules; it is not advice on your own tax position.

At a glance: the figures before and after

The before column is the 2026 to 2027 position, read on GOV.UK and legislation.gov.uk on 26 October 2026 and, where the rates annex gives a figure, checked again on Budget day against its 2026 to 2027 column. The after column comes from the papers published on GOV.UK on 28 October 2026: the Budget document (HC 726, published at 13:30 GMT), the Treasury's policy costings (13:30) and HMRC's Overview of Tax Legislation and Rates, OOTLAR, with its rates annex (13:43), all read between 13:32 and 13:48 GMT. HMRC's separate tax information and impact notes were not yet on GOV.UK at 13:47. The income tax rows cover England, Wales and Northern Ireland; Scotland sets its own income tax bands, and Scotland and Wales their own taxes on buying property.

Income tax on rental profit

For 2026 to 2027 rental profit is added to your other income and taxed at 20% from £12,571 to £50,270, 40% up to £125,140 and 45% above that. The £12,570 personal allowance falls by £1 for every £2 of adjusted net income over £100,000. Before the Budget, the Finance Act 2026 had already set separate rates on property income for 2027 to 2028: 22%, 42% and 47%, two points above the rates on earnings, for England, Wales and Northern Ireland.

The Budget adds 2 more points. For 2027 to 2028 the property basic rate is announced at 24%, the property higher rate at 44% and the property additional rate at 49%, in England, Wales and Northern Ireland (Budget para 6.246; OOTLAR 1.1 and 1.2). The rise is to be legislated in the Finance Bill 2026-27. Until that bill becomes law, the 22%, 42% and 47% in the Finance Act 2026 are the rates on the statute book.

Savings income gets the same 2 points from 6 April 2027, across the UK (Budget para 6.247), so bank interest above your savings allowances is taxed at 24%, 44% or 49% too. Dividends do not: 10.75%, 35.75% and 39.35% stay for 2027 to 2028. The personal allowance and the bands do not move either. The rates annex gives £12,570, a basic rate band of £37,700 and the additional rate over £125,140 for both years, and the thresholds stay frozen to 5 April 2031, as they were before the Budget.

On that £20,000 the Budget adds £400 to the 2027 to 2028 bill, which is now £800 more than this year's.

Mortgage interest and Section 24

Individual landlords do not deduct mortgage interest from rental profit. They get a tax reduction on the lowest of their finance costs, their property profits and their adjusted total income above the personal allowance: 20% of it for 2026 to 2027, and the property basic rate from 2027 to 2028 (Income Tax (Trading and Other Income) Act 2005 s.274AA(5), as amended by the Finance Act 2026, read on legislation.gov.uk at 13:37 GMT on Budget day). A company is not under Section 24: it deducts its interest as a cost before Corporation Tax.

The Budget leaves the restriction itself alone. Because the reduction is worked at the property basic rate, the announced 24% takes it to 24% for 2027 to 2028, where it was due to be 22%. The Treasury's costings say finance cost relief "will continue to be aligned to the property basic rate". For 2026 to 2027 it stays at 20%.

The example assumes all the profit sits in the higher rate band and the reduction is not cut back by the profits or income limits. A higher rate landlord pays 44% on the profit and gets 24% back on the interest: the same 20 point gap as before the Budget. For an additional rate landlord the gap stays at 25 points (49% against 24%), and for a basic rate landlord the tax on the interest and the reduction still match.

Put another way, if your band stays the same and the limits do not bite, the announced rates add 2% of your rental profit after mortgage interest to the 2027 to 2028 bill, whichever band you are in. On the example above that is 2% of £10,000: £200.

The Section 24 calculator works the 2026 to 2027 reduction on your own figures, and Section 24 and phantom income explains why the profit taxed is higher than the cash you keep.

Stamp Duty on a buy-to-let

Before the Budget a home in England or Northern Ireland paid 0% on the first £125,000, 2% on the next £125,000, 5% up to £925,000, 10% up to £1.5 million and 12% above. A buyer who will own more than one home usually pays 5 percentage points on top of every band, and a buyer who is not resident in the UK 2 more.

The Budget left Stamp Duty on additional homes as it was. The rates annex published with it gives the same bands, the same 5 point surcharge for an additional home, the same 2 point surcharge for certain non-UK residents, and the same 17% rate on a home over £500,000 bought by certain companies (OOTLAR Annex A). No measure touches the £40,000 level below which a purchase does not pay the higher rates. Two narrower Stamp Duty items in the papers can reach a landlord:

• Rent under an assured tenancy in England. This was announced on 22 April 2026, before the Budget, and has effect from 1 May 2026: no Stamp Duty on the rent paid under an assured tenancy, and no Stamp Duty return needed solely because rent is payable under one. The Budget confirms it goes into the Finance Bill 2026-27 (Budget para 6.237; OOTLAR 1.61).
• Group relief for companies in a group, announced at the Budget. Where the buying company later leaves the group, the relief can be clawed back within the usual three years even if the company that sold it the property has been wound up. It applies to property in England and Northern Ireland from 29 October 2026 (Budget para 6.169; OOTLAR 1.62).

The full band by band workings are in how much stamp duty on a buy-to-let, and the stamp duty calculator runs your own price.

Capital Gains Tax when you sell

A gain on a let property is taxed at 18% within your unused basic rate band and 24% above it, after a £3,000 allowance. On a UK home the gain is reported and the tax paid within 60 days of completion, and the sale goes on your Self Assessment return as well.

The Budget changed none of that. The rates annex gives 18% and 24%, and a £3,000 allowance, for both 2026 to 2027 and 2027 to 2028 (OOTLAR Annex A). GOV.UK's page on reporting and paying the tax still gave 60 days when read at 13:15 GMT on Budget day. Its changes to Capital Gains Tax reliefs are a new Founders' Relief and a lower lifetime limit for Business Asset Disposal Relief, £500,000 from 6 April 2027 (Budget para 6.261). Neither changes the rates or the allowance on a let property.

One change helps a landlord who reports late. Late filing penalties on a UK property disposal return will stop building up once the sale has been reported on the Self Assessment return, from 28 October 2026 (OOTLAR 1.31). It is announced, to be legislated in the Finance Bill 2026-27. The 60 days still apply.

The CGT calculator and the capital gains tax guide for landlords cover the costs you can deduct and private residence relief.

Making Tax Digital and paying your tax

Before the Budget, landlords and sole traders with qualifying income over £50,000 on their 2024 to 2025 return have needed Making Tax Digital since 6 April 2026. The threshold falls to £30,000 from 6 April 2027 (judged on the 2025 to 2026 return) and £20,000 from 6 April 2028. There are no penalty points for a missed quarterly update in 2026 to 2027.

The thresholds and the dates do not change. The Budget papers refer to the taxpayers required to join in April 2027, and no measure moves the £30,000 or the £20,000 (Budget para 6.152; OOTLAR 2.36). Three things did change, all announced:

• No penalty points on late quarterly updates in the first year for those required to join in April 2027. If you have to join from 6 April 2027, your quarterly updates for 2027 to 2028, the first four, will get no late submission penalty points (Budget para 6.152; OOTLAR 2.36). The updates still have to be sent before the tax return for the year can be filed, and the penalties for a late tax return still apply. No change was announced to the late payment penalties. HMRC's overview and the costings give the easement to those required to join in April 2027; the papers do not extend it to those who joined in April 2026, or to anyone who signs up voluntarily.
• New exemptions, until further notice: people eligible for qualifying care relief, non-UK resident foreign entertainers and sportspeople, and "expected non-resident customers" (OOTLAR 2.37). The papers do not define the last group, and the rules come in secondary legislation before April 2027. A landlord who lives abroad should wait for that text before relying on it.
• A change to how payments on account are made, from April 2029. People who make payments on account under today's rules will make smaller, more regular payments during the year, automated and based on a forecast of their previous liability, and those with enough PAYE income can choose to pay through PAYE (Budget paras 2.33 and 6.147; OOTLAR 2.31; policy costings, More Timely Payment). The costings place it in the 2029 to 2030 tax year, and the detailed design is still to be worked out with taxpayers. Until then payments on account stay as they are, on 31 January and 31 July.

The Budget also announces a consultation on widening the property income data that third parties report to HMRC (Budget paras 2.35 and 6.157).

Who joins Making Tax Digital in April 2027 works through the £30,000 test.

Allowances, mileage and the register fee

A search of the Budget document, OOTLAR, its rates annex and the costings at 13:48 GMT found no mention of the £1,000 property allowance or of Rent a Room (£7,500 a year from furnished rooms in your own home, £3,750 if the income is shared). Both stay at their current figures unless the Finance Bill says otherwise.

Watch for one mix-up. The Budget announces a rise in the trading allowance from £1,000 to £3,000 from 6 April 2027, for trading and miscellaneous income, with the Self Assessment reporting threshold for trading income going to £3,000 too, to be legislated in the Finance Bill 2026-27 (Budget para 6.254; OOTLAR 1.5). That is a different allowance. Nothing in the papers moves the £1,000 property allowance.

The 55p rate for the first 10,000 business miles in a car or van, in place since 6 April 2026, is to stay. After 10,000 miles the rate is to rise from 25p to 35p from 6 April 2027, both for mileage allowance payments and for the flat rates used in simplified expenses. The government announced this on 27 October 2026 and the Budget confirms it; a statutory instrument is to make the change ahead of the 2027 to 2028 tax year (Budget para 6.213; OOTLAR 2.7). The papers do not mention the 24p rate for motorcycles. Where mileage is claimed at the flat rates:

The register fee was announced before the Budget. The Treasury's policy costings confirm it: £65 a year for each property in England that has to be registered on the Register your rental property service, effective from 15 December 2026. The costings also allow for the service being rolled out in phases and for the fee being pro-rated where that applies, without setting out how. The Budget document itself gives no figure for the fee. The PRS Database registration page has each region's deadline.

Landlords who let through a company

A company pays Corporation Tax on its letting profit: 19% on profits of £50,000 or less, 25% over £250,000, with marginal relief between. Profit taken out as a dividend is taxed on the shareholder at 10.75%, 35.75% or 39.35% above a £500 allowance for 2026 to 2027. The property income rates apply to individuals, not to companies, so the 2 point rise does not reach a company's letting profit.

Corporation Tax does not change. The rates annex sets 19%, 25%, the £50,000 and £250,000 limits and the 3/200 marginal relief fraction for each financial year to 31 March 2029 (OOTLAR 1.38 and Annex A). Dividend tax and the £500 allowance do not change for 2027 to 2028. What does move:

• ATED rises by 3.5%, in line with the September 2026 CPI, for the charging period from 1 April 2027. This one is not new law: the uprating is already provided for in legislation and is to be confirmed in a Treasury Order. The annual charge for a home worth £500,001 to £1 million goes from £4,600 to £4,750, and for £1 million to £2 million from £9,450 to £9,750 (Budget para 6.235; OOTLAR 2.17 and Annex A).
• Capital allowances, announced: the main rate writing-down allowance falls 2 points to 12%, from 1 April 2027 for Corporation Tax and 6 April 2027 for income tax, and the main rate first-year allowance rises from 40% to 50% for spending from 1 January 2027 (Budget para 6.251; OOTLAR 1.42).
• Distributions: the framework for company distributions is to be modernised from April 2028, with draft legislation in 2027 (Budget para 6.181; OOTLAR 2.15).

There is no new relief for moving property into a company. The Treasury's costings expect only a limited move into companies in response to the higher property rates.

Council tax, energy and the rest

• High Value Council Tax Surcharge. Announced at Budget 2025 and to be legislated in the Finance Bill 2026-27: from April 2028, homes in England worth £2 million or more are to pay a surcharge. The government's response to the consultation, published on Budget day, puts it on the legal owner, not the occupier: the freeholder, or a leaseholder on a lease of more than 21 years. On a let home that is the landlord, and companies and trustees that own homes are liable too. A home left substantially unfurnished and unoccupied for 12 months or more is to pay a 100% premium, and there is to be a deferral scheme (HVCTS response paras 3.1, 3.3 and 6.12; Budget para 6.234; OOTLAR 1.22).
• Energy-saving work. VAT on installing energy-saving materials in homes goes back to 5% from 1 April 2027, as announced when the 0% rate began in 2022, and heat batteries are to join the list from the same date (Budget para 6.215; OOTLAR 2.22). If you plan work to raise a let home's EPC rating, that date matters. The papers contain no new grant for EPC upgrades.
• Bills-included lets. The 0% VAT on domestic electricity in Great Britain is to be extended to 30 June 2027 (Budget para 3.4; OOTLAR 2.20). The government has asked Ofgem to abolish gas standing charges on domestic bills in Great Britain, aiming for delivery by the end of 2027 or as soon as possible after then, with suppliers recovering the cost through the gas unit rate instead (Budget paras 3.9 and 6.25). A £100 Household Energy Payment goes to homes in council tax bands A to D in England from January 2027, through the council tax system (Budget para 6.24). The papers do not say who receives it where the landlord pays the council tax.
• Supported housing. A licensing regime to enforce national standards in England from 2027 to 2028 (Budget para 6.115).
• Property abroad. International automatic exchange of information on real estate from 2029 to 2030 (Budget Table 6.3).

What the Budget did not change

• Income tax for 2026 to 2027: 20%, 40% and 45%, with the £12,570 personal allowance and the £50,270 higher rate threshold, frozen to 5 April 2031.
• The Section 24 reduction for 2026 to 2027: 20%.
• Dividend tax: 10.75%, 35.75% and 39.35% above a £500 allowance, for 2026 to 2027 and 2027 to 2028.
• Stamp Duty: the bands, the 5 point surcharge on an additional home, the 2 point surcharge for certain non-UK residents and the 17% company rate over £500,000.
• Capital Gains Tax: 18% and 24%, the £3,000 allowance and the 60 days to report the sale of a UK home.
• Making Tax Digital: over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028.
• The property allowance at £1,000 and Rent a Room at £7,500 (£3,750 shared): the Budget papers do not mention either.
• Mileage: 55p a mile for the first 10,000 miles.
• Corporation Tax: 19% and 25%, with the £50,000 and £250,000 limits.
• Payments on account on 31 January and 31 July, until the April 2029 change.

Dates to put in the diary

What to do now

1. 1Leave 2026 to 2027 as it is. The income tax rates, the 20% Section 24 reduction, Stamp Duty and Capital Gains Tax are unchanged for this tax year, so nothing already recorded needs reworking.
2. 2Rework next year at 24%, 44% and 49%. If you planned 2027 to 2028 at 22%, 42% and 47%, add 2% of your rental profit after mortgage interest, on the conditions in the Section 24 example above.
3. 3Check whether you join Making Tax Digital in April 2027. Qualifying income over £30,000 on your 2025 to 2026 return means you do, as before the Budget. The penalty easement covers late quarterly updates in your first year, not the tax return.
4. 4Set aside £65 a property for the register. It is an annual fee for each property in England that has to be registered, from 15 December 2026.
5. 5No Budget reason to rush a purchase or a sale. The Stamp Duty rates, the Capital Gains Tax rates and the CGT allowance did not change, on Budget day or from a later date.
6. 6Time any energy-saving work. VAT on installing energy-saving materials goes back to 5% from 1 April 2027.

Your own figures under the new rules

See what the Budget does to your lets. LetCompliance runs the let from one login: the advert, the tenancy, the rent and the repairs, with the money recorded as the let runs. On a paid plan, from £7.99 a month, each cost is filed against its property in its SA105 category, the Section 24 page works out the finance cost reduction on your own figures, and LetCompliance is recognised by HMRC for Making Tax Digital and sends the quarterly updates for your UK property income from the same records. When you sell, the property keeps its capital gains record: the price paid, the improvements logged over the years and the costs of sale. For the register, each property's pack answers the items the draft regulations ask for from the records already kept.

The figures LetCompliance and the calculators on this site work out for 2026 to 2027 are unchanged by the Budget. The public mileage calculator already works 2027 to 2028 at the announced 35p after 10,000 miles, and marks it as announced. Inside LetCompliance, a 2027 to 2028 figure in the tax pack, the mileage log or the accountant view still uses the rates in force before the Budget: a 22% Section 24 reduction, and 25p a mile after 10,000 miles. Those move to the announced 24% and 35p once each change has been checked against the Budget papers and the legislation that makes it.