It’s a tumultuous time for landlords. The Autumn Budget has landed amid rising costs, regulatory changes, and persistent market uncertainty. Many property owners are asking the same question: what does this mean for me, and how should I respond? The latest announcements signal further pressure on margins, making strategic planning more important than ever.
Tax on Property Income
From April 2027, income tax rates on property income will rise by two percentage points across all bands:
- Basic rate: 22% (up from 20%)
- Higher rate: 42% (up from 40%)
- Additional rate: 47% (up from 45%)
The Office for Budget Responsibility warns that this will erode returns and could lead to higher rents or even property sell-offs over time. This change is limited to England and Northern Ireland, due to the devolution of property income tax rates to the Scottish government. Having targeted LBTT in previous budgets an increase to Scottish rates for property income should not be ruled out. The Scottish government is delivering their budget on 13 January 2026.
Tax on Dividends:
Dividend tax rates will also rise by 2 percentage points from April 2026, moving to:
- Basic rate: 10.75% (up from 8.75%)
- Higher rate: 35.75% (up from 33.75%)
- Additional rate remains at 39.35%
This will affect landlords operating through limited companies who rely on dividends for income, increasing overall tax liabilities.
Tax on Savings income:
The Savings tax rate will also rise by 2 percentage points, from April 2027 moving to:
- Basic rate: 22% (up from 20%)
- Higher rate: 42% (up from 40%)
- Additional rate: 47% (up from 45%)
This change will particularly affect landlords operating off a passive income model, which combined with the reduced cash ISA allowance £20,000 to £12,000 for under-65s, with the remaining £8,000 balance to be invested into Stocks & Shares ISAs, limiting tax-efficient savings options and increasing exposure to higher tax rates.
High-Value Property Levy (“Mansion Tax”) (April 2028):
From April 2028, properties worth over £2 million will face an annual surcharge of £2,500–£7,500, based on the value of the property.
As this policy has been brought in as an enhancement to council tax, a devolved issue in Scotland, this policy will not apply to Scottish properties. It may be only a matter of time for this to cause a market skew towards valuing slightly below the threshold as is across the rest of the UK.
Inheritance Tax:
Defying many expectations the main changes to IHT during the Autumn budget was allowing the transfer of the £1,000,000 BPR and APR allowance between spouses. IHT may have a tangible impact on landlords, as pensions will be included within inheritance tax calculations from April 2027.
This highlights the importance of early succession planning to navigate the complex tax structure in relation to inheritance.
If you’re unsure how these changes affect your portfolio, now is the time to review your tax position and explore mitigation strategies. Get in touch to ensure you’re prepared for April 2026 and beyond.
by Max Short