Autumn Budget 2026: What Landlords Need to Know
Published on October 31, 2026 by Sarah Mac
The Autumn Budget, delivered on 28 October 2026, brought further financial pressures for private landlords, with higher property income tax rates among the most significant announcements.
For landlords already managing rising operating costs and adapting to the Renters’ Rights Act, the latest measures could have a noticeable effect on rental profitability.
So, what exactly has changed, when will the new rules take effect, and what should landlords be doing to prepare?
Property income tax rates to rise from April 2027
The biggest announcement for buy-to-let landlords was a further increase in Income Tax on rental profits.
The 2025 Budget had already introduced plans to increase property income tax rates by two percentage points from April 2027. The Autumn Budget 2026 added another two percentage points, bringing the total increase to four percentage points compared with current rates.
From 6 April 2027, the new property income tax rates will be:
- Basic rate: 24%, up from 20%
- Higher rate: 44%, up from 40%
- Additional rate: 49%, up from 45%
These new rates will apply to individuals receiving taxable property income in England, Wales and Northern Ireland, including landlords who own rental properties personally.
The changes don’t automatically apply to rental profits earned through limited companies, which are subject to Corporation Tax instead.
According to HMRC’s assessment of the changes, approximately 2.4 million landlords are expected to be affected by 2031–32.
What will higher property taxes mean for rental profits?
The increase means landlords could retain less of their rental income after tax, even if their rental income and operating costs remain unchanged.
For example, a basic-rate taxpayer with £10,000 of taxable rental profits would currently pay £2,000 in Income Tax on those profits, assuming the full amount falls within the basic-rate band.
Under the new 24% property income tax rate, that liability would rise to £2,400, an additional £400 per year.
For a higher-rate taxpayer with the same taxable profits, the equivalent increase would also be £400, assuming all the profits fall within the higher-rate band.
The actual impact will depend on individual circumstances, including other sources of income, allowable expenses and applicable tax reliefs.
Landlords with mortgages should also remember that the existing restrictions on residential mortgage interest relief remain relevant. For individual landlords, finance costs generally qualify for a basic-rate tax reduction rather than being deducted directly from rental income when calculating taxable profits.
This can make the relationship between taxable rental income and actual cash profit particularly important.
With higher tax liabilities approaching, landlords may wish to review their projected returns and seek professional tax advice before making decisions about their portfolios.
High-value rental properties face an additional council tax charge
The Budget also confirmed further details of the High Value Council Tax Surcharge, originally announced in 2025.
From April 2028, owners of residential properties in England valued at £2 million or more will face an additional annual charge.
The proposed charges are:
- £2 million to £2.5 million: £2,500 annually.
- £2.5 million to £3.5 million: £3,500 annually.
- £3.5 million to £5 million: £5,000 annually.
- £5 million or more: £7,500 annually.
Importantly, this is an owner liability, meaning it can affect landlords even where tenants are responsible for the property’s ordinary council tax.
The surcharge will apply in addition to existing council tax, with valuations used to establish which properties fall within its scope.
The government has also confirmed plans for discounts, exemptions and a deferral scheme in certain circumstances.
Although the measure will affect a relatively small proportion of rental properties, landlords with high-value investments should factor the additional charge into their longer-term financial planning.
Further details are available in the government’s High Value Council Tax Surcharge guidance.
Making Tax Digital: A temporary easing of penalties
Making Tax Digital (MTD) for Income Tax is already being introduced in stages, and the Autumn Budget confirmed some additional transitional arrangements.
The existing rollout requires landlords and sole traders with qualifying gross income above £50,000 to use MTD from April 2026. Those with qualifying income above £30,000 must join from April 2027, followed by those above £20,000 from April 2028.
Qualifying income includes gross income from property and self-employment before expenses, rather than taxable profit alone.
Under MTD, affected landlords must maintain digital records and submit quarterly updates to HMRC using compatible software.
The Budget confirmed that HMRC won’t apply late-submission penalty points to quarterly updates for the 2027–28 tax year for taxpayers required to join MTD in April 2027.
However, this doesn’t remove the obligation to submit updates, and landlords will still need to complete their annual tax return and meet applicable payment deadlines.
We covered the introduction of MTD in our earlier article, 2026: What’s on the Horizon in the Private Rented Sector?.
Landlords who haven’t yet registered for MTD can also find guidance and sign up for Making Tax Digital directly through HMRC.
What should landlords do following the Autumn Budget?
While some measures won’t take effect until 2027 or 2028, landlords can use the intervening period to assess their financial position.
Practical steps include:
- Review rental profitability: Calculate projected returns using the new property income tax rates, allowing for maintenance, insurance, mortgage costs and other expenditure.
- Check ownership arrangements: Understand how the changes affect personally owned properties compared with properties held through limited companies, taking professional advice before considering any restructuring.
- Prepare for Making Tax Digital: Check qualifying income, registration requirements and whether existing accounting software is compatible.
- Budget for future costs: Consider upcoming tax liabilities alongside existing property maintenance and compliance responsibilities.
- Maintain accurate records: Keep financial documentation, maintenance records and independent property condition reports organised and accessible.
For landlords managing multiple properties, having reliable information about each investment can make it easier to identify where expenditure is increasing and where further financial planning may be needed.
Planning ahead for a more expensive rental market
The Autumn Budget 2026 adds to the financial considerations facing private landlords, particularly those who own properties personally.
Higher property income tax rates will affect rental returns from April 2027, while the High Value Council Tax Surcharge introduces another potential cost for owners of more expensive properties from April 2028.
Although the changes won’t affect every landlord equally, reviewing tax liabilities, maintaining accurate records and planning for future expenditure can help property owners make informed decisions.
At SRP Inventories, we support landlords and letting agents with independent inventory, check-in and check-out reports, providing reliable evidence of property condition to support effective tenancy management.