Autumn Budget 2026: Key property and tax changes for owners, landlords and investors

From 6 April 2027 the property income rates for individuals rise to 24% at basic rate, 44% at higher rate, and 49% at additional rate. This Budget added two percentage points to the 22%, 42%, and 47% rates already set last year, so rental profit is now taxed four points above wages and pensions. Savings income rises in the same way across the UK. For property income, Scotland sets its own rates on non-savings income entirely, and Wales has limited variation powers; the rates quoted here apply in England, Wales, and Northern Ireland subject to those devolved positions.

The cost is straightforward to size. A higher rate landlord with £20,000 of rental profit pays £8,800 in 2027/28 against £8,000 this year, and £400 of that increase is new in this Budget. Income tax thresholds stay frozen until April 2031, so rent increases will also pull more basic rate landlords into the 44% band over time. Relief for mortgage interest remains a credit at the property basic rate, which means a higher rate landlord relieves interest at 24% against a 44% charge. The gap between the relief and the rate of tax has widened again.

Companies are unaffected, because they pay corporation tax and deduct interest in full. That will prompt some owners to consider moving properties into a company, but incorporation is a disposal for CGT (subject to any reliefs) and usually a trigger for SDLT, so the cost of moving is immediate while the saving accumulates year by year. For most existing portfolios the case rests on the numbers per property rather than the headline rate differential.

The Office for Budget Responsibility expects the measure to raise approximately £0.4 billion a year from 2028/29. It also expects fewer new landlords and some pass-through to tenants over time. Owners who let property from abroad are within the same rates as UK residents, because the charge follows the property.

Where incorporation is the right answer, our real estate team can assist with the conveyancing and SDLT aspects of the transfer. Owners who have not reviewed their holding structure in light of the successive rate increases should do so now.

The High Value Council Tax Surcharge starts in April 2028 for residential property in England valued at £2 million or more on April 2026 values. Talk of lowering the threshold to £1.5 million was dismissed before the Budget, and the £2 million line stands. Legislation is due in Finance Bill 2026-27, and the bands and conditions described below are subject to the final legislation.

Value (April 2026)

• £2m to £2.5m: Annual surcharge £2,500
• £2.5m to £3.5m: Annual surcharge £3,500
• £3.5m to £5m: Annual surcharge £5,000
• £5m and above: Annual surcharge £7,500

The Valuation Office will run a separate valuation exercise, so the charge does not follow existing council tax bands. Draft valuations are expected in autumn 2027, first bills in March 2028, and owners can challenge a band and appeal to the Valuation Tribunal for England. The charge rises with CPI from 2029/30.

The person liable is the legal owner, not the occupier or beneficial owner. The legislation does not currently provide for an owner-occupier exemption, though this is a point to watch as the Bill progresses. For homes held by trustees or companies, the bill lands on the trustee or company and will need to be recharged or funded from elsewhere. This should be addressed in trust deeds and shareholder arrangements well before 2028. A deferral scheme will be available where household income is £35,000 or less, capital savings are £16,000 or less, or a household member meets the disability criteria. A 100% premium applies to a property left substantially unfurnished and unoccupied for 12 months or more.

The annual tax on enveloped dwellings is a separate charge and rises 3.5% for 2027/28, in line with September CPI. Company-held homes worth £2 million or more should expect to fall within the scope of both charges unless the legislation provides otherwise.

Owners of properties that may be approaching the £2 million threshold should take advice on their April 2026 value and their legal ownership position now, while there is still time to act before the first bills arrive.

The rates many expected to move did not. SDLT rates, thresholds, and the 5% surcharge on additional dwellings are unchanged, and residential CGT stays at 18% and 24% with the £3,000 annual exempt amount. Those who held back a sale or purchase waiting for a change can proceed on known costs.

Three technical changes matter for specific owners. SDLT on the rent element of assured tenancies in England has been removed from 1 May 2026, following the Renters’ Rights Act 2025, along with the associated filing requirement. This is a welcome simplification for landlords granting new assured tenancies, and our real estate team can advise on the implications for lease documentation and the removal of the filing obligation. SDLT group relief is tightened with effect from 29 October 2026: winding up the vendor company no longer prevents clawback where the purchaser leaves the group within three years. This change came with no notice, and Pinsent Masons has warned that, as drafted, it could catch genuine commercial reorganisations. Businesses with intra-group property transfers in progress should check their position against the new rules immediately, and our real estate and tax teams can review transactions in progress together. For non-resident sellers of UK residential property, late filing penalties stop accruing from 28 October 2026 once the disposal is reported on the self-assessment return, though the 60-day reporting deadline itself has not moved.

For buyers, the new Your First Home scheme offers 20% equity loans interest-free for five years to buyers with a deposit of between 2.5% and 15%, with household income caps of £110,000 (£140,000 in London) and price caps of £650,000 in inner London and £500,000 in outer London. Pre-registration opens by the end of December 2026 and the first loans are expected from April 2027. The OBR judges that the scheme will add little to supply and may nudge prices up slightly. Buyers using the scheme should also check the interaction with SDLT first-time buyer relief, which is a separate question, and our real estate team can advise on both the conveyancing process and the SDLT position for first-time buyers using the scheme. A First Time Buyer ISA replaces the Lifetime ISA for new savers from April 2029, and from 29 October 2026 the withdrawal charge on a Lifetime ISA used above the £450,000 price cap falls to 20%.

For those buying or selling investment property, the unchanged CGT and SDLT rates mean that transactions can be planned on a known cost basis.

The least expected measure ends sovereign immunity for UK property. From 1 January 2029 a statutory sovereign tax status replaces the current practice-based exemption. This measure is primarily relevant to sovereign wealth funds and state-owned investors rather than private owners, but its reach is significant. Income from UK land and gains on direct holdings and property-rich vehicles become taxable, broadly as for non-resident companies, with assets rebased to market value at 1 January 2029. An application to HMRC will be required even from sovereigns that are currently exempt. In return, the government proposes a sovereign REIT holding company structure paying 15% on property income distributions, and a time-limited SDLT relief from 2028 to at least 31 December 2030 for restructuring existing holdings. The interaction between the sovereign REIT structure and existing REIT rules is a key question that the consultation will need to address. The consultation closes on 20 January 2027 and legislation is expected in Finance Bill 2027-28. Sovereign funds should model post-2029 returns now and consider whether a REIT route suits their holdings. Our tax and real estate teams can advise on the restructuring options and the SDLT relief available during the transition window.

Developers and landowners receive a VAT change they have long sought. From 1 April 2027 land sold to registered social housing providers is zero-rated at any stage, which removes the need to engineer a sale around the golden brick, the point at which construction passes foundation level. Draft legislation is expected in early 2027 and the definition of a qualifying housing association is likely to be narrow. Transactions currently in progress may be worth holding back until April to benefit from the zero rate. Our real estate team advises on land disposals to registered providers and can assist with the structuring and timing of transactions to take advantage of the new zero rate, working with the tax team on the VAT analysis. Alongside this come £1.5 billion more for social and affordable homes covering around 10,000 homes, a further year of cheaper council borrowing, and an exemption from biodiversity net gain for brownfield sites up to 1.5 hectares.

Capital allowances move in both directions. The main rate first-year allowance rises from 40% to 50% for spending on or after 1 January 2027, while the main rate writing-down allowance falls from 14% to 12% from April 2027. Full expensing remains in place. Owners with large existing pools of plant and machinery will recover relief more slowly, and refurbishment or fit-out spending is better timed for January where possible. Lease and leaseback arrangements over plant face a wider anti-avoidance definition from 28 October 2026, and any existing or proposed arrangements of this kind should be reviewed against the new rules.

Industry reaction has been cool. Estates Gazette reported warnings that the viability crisis in development has not been addressed, and build-to-rent operators noted that the surcharge on additional dwellings remains and that removing SDLT on assured tenancy rent does nothing for acquisition costs.

The removal of SDLT on the rent element of assured tenancies is the most direct Budget measure affecting lease transactions, but the broader picture for landlords and tenants granting or taking new leases is one of unchanged SDLT rates and thresholds. SDLT on the grant of a commercial lease continues to apply to both the premium and the net present value of the rent, and the position on residential long leases is also unchanged.

For landlords letting commercial property, the business rates changes described below will affect the attractiveness of high street units to prospective tenants, and lease negotiations in the retail, hospitality, and leisure sectors may need to reflect the improved rates position from April 2027.

The direct support goes to qualifying retail, hospitality, and leisure properties in England. From April 2027, Small Business Rate Relief gives 100% relief up to a rateable value of £18,000 (from £12,000) and tapered relief up to £21,000 (from £15,000). Bill increases for qualifying properties are capped at CPI in 2027/28 and 2028/29. Relief for pubs, social clubs, and most live music venues rises from 15% to 35%. The government projects that half of these properties will pay no rates and a further 110,000 will see lower bills.

The cost falls on others. The relief is funded partly by making online marketplaces liable for VAT on sales by UK sellers from October 2027, and by higher Machine Games Duty. Vape shops and adult gaming centres lose access to the retail, hospitality, and leisure multipliers, and vape shops lose Small Business Rate Relief as well.

Smaller points for landlords and occupiers: the 1p Transitional Relief Supplement continues for two more years, and Valuation Tribunal appeal fees are abolished for the 2026 list and later, with refunds for fees already paid. A general anti-avoidance rule for business rates will follow consultation, which matters for owners who rely on arrangements around empty property. Landlords of high street units should find tenants better able to pay, and those with empty units should expect more scrutiny. Our real estate team can advise landlords on the implications of the rates changes for lease negotiations and on the management of empty property liabilities.

Landlords in England face a £65 annual fee per property to use the new rental registration service, from 15 December 2026, with around 4.9 million properties expected to be in scope. Making Tax Digital for income tax extends to landlords with qualifying income over £30,000 from April 2027, having applied above £50,000 since April 2026. HMRC is also consulting on wider third-party reporting of property income.

The measure with the longest reach is international. HMRC’s report on modernising its approach to wealthy compliance, published alongside the Budget, commits the UK to join the OECD framework for automatic exchange of information on immovable property from 2029/30. The UK will share data on holdings and transfers of UK property with partner jurisdictions and receive theirs in return, in the way it already does under the Common Reporting Standard and, since earlier this year, the Crypto-Asset Reporting Framework.

The exchange works in both directions. For families with property in more than one country, a UK home or let portfolio will become visible to foreign tax authorities, and overseas property held by UK residents will become visible to HMRC. Reporting positions in all relevant jurisdictions should be checked for consistency before the first exchange, particularly where a property is held through a company or trust. For families with connections to the United States or other partner jurisdictions with their own disclosure regimes, the interaction between the OECD exchange and existing reporting obligations requires specific attention.

The 2029/30 exchange date may feel distant, but the time to review reporting positions and ownership structures is now, not when the first exchange has already taken place.

Landlords holding property personally should rerun each property at 24%, 44%, and 49%, with mortgage interest relieved at 24%, and consider who owns what within a couple. Moving a portfolio into a company is a possible answer for some, but only after the CGT and SDLT on the transfer have been priced. The answer will differ property by property. Our tax and real estate teams can work through the analysis together.

Owners of homes that may be worth £2 million or more should establish their April 2026 value now, since that is the date the Valuation Office will use, and confirm who is the legal owner. Where the home sits in a trust or a company, the funding of a £2,500 to £7,500 annual charge from 2028 should be settled between the trustees or directors and the family. Draft valuation bands are due in autumn 2027, and evidence to support a challenge should be gathered now rather than at that point.

Businesses with intra-group property transfers in progress should check them against the SDLT group relief change that took effect on 29 October 2026. Landowners selling to housing associations should consider whether a sale can wait for the zero rate on 1 April 2027. Anyone planning refurbishment or fit-out spending should look at 1 January 2027 for the 50% first-year allowance.

Landlords granting new assured tenancies should note that SDLT on the rent element no longer applies and that the associated filing requirement has gone. Lease transactions more broadly can proceed on the basis of unchanged SDLT rates, but the interaction with the group relief changes should be checked where a lease is being granted or assigned within a corporate group.

Families with property in more than one jurisdiction should review how each property is held and reported, ahead of automatic exchange from 2029/30. Non-resident owners of UK let property should confirm that their filing positions are current, since the reporting deadlines have not moved.