Autumn Budget 2025: What Landlords Need to Know

The Autumn Budget 2025 delivered changes for landlords across the UK, with new tax measures that will impact rental profitability, portfolio planning, and long-term investment decisions. Whether you have a single rental property or a large portfolio, it’s important to understand how these updates will affect your bottom line.

In this post, we break down our reading of the key announcements and set out the most important takeaways for residential landlords.

1. Property income tax rates are rising

From April 2027, the government will introduce a 2% increase on tax applied to property (rental) income. This means:

• Basic rate taxpayers will pay 22%
• Higher rate taxpayers will pay 42%
• Additional rate taxpayers will pay 47%

For some, this may reduce net yields, particularly where rental income is already tight. Importantly, the higher rate will be on taxable profit, not turnover which some in the sector had feared.

2. New annual “Mansion Tax” on high-value homes

From April 2028, the Budget introduces a new annual surcharge on residential properties valued at over £2 million. Often dubbed the “mansion tax,” this surcharge applies whether the property is owner-occupied or let out.

Indicative charges include:

• Properties £2m–£2.5m: around £2,500 per year
• Higher-value bands (e.g., £5m+): up to around £7,500 per year

The reality is that such high-value homes available for rent are largely limited to London and the South East, not the South Cotswolds – yet!

3. Income tax threshold freeze continues until 2030

The government confirmed that income tax thresholds will remain frozen until at least 2030–31. This “fiscal drag” means:

• As rents rise with inflation, more landlords may be pushed into higher tax bands
• You could pay more tax even if your real (after-inflation) income hasn’t increased
• Portfolio landlords with several properties may feel this effect most sharply

This measure compounds the impact of the new property-income tax rise and will be important to factor into forward financial planning.

4. No new Stamp Duty or National Insurance changes for landlords

Contrary to rumours, the Budget did not include any major changes to stamp duty thresholds or surcharges for landlords. For now, the existing 3% additional homes surcharge remains unchanged.

There was also no introduction of National Insurance on rental income, which had been speculated before the Budget. Instead, the government opted for the simpler property-income tax increase.

So, what does all this mean for landlords?

All things considered, we think we and our landlords can breathe a collective sigh of relief. The impact of the Budget on the private rental sector is fairly limited, with other rumoured tax horrors not coming to pass. Phew!

Our key takeaways:

• Tax increases are likely to be recovered through rent increases
  Tax rises will squeeze profitability, so landlords need to evaluate whether rental prices still reflect market conditions and rising costs.
  We will be helping landlords to manage rent increases under new rules to be implemented in May 2026 under the Renters’ Rights Act.
• There is time to plan
  The key changes are not due to take effect until 2027 (landlord income tax) and 2028 (Mansion Tax), so there is time for landlords to reflect on the impact of the changes and work with their agents and accountants to optimise their ongoing rental returns.
• Strong rental demand will continue to drive growth
  With demand outstripping supply across the South Cotswolds, rents remain stable or rising – supporting continuing healthy yields.
• No more budget uncertainty (until next year!)
  Perhaps most importantly, after months of speculation, leaks and rumours the Budget is now confirmed – it’s done. Landlords and home-movers can get on with planning their affairs with greater confidence and certainty which is always a good thing.