Downing Street sign on white brick wall

Category: government and politics

The highly anticipated Autumn Budget has been officially announced by Rachel Reeves in the House of Commons.

Nicknamed “the most leaked budget in history”, many details were previously reported to the UK press – some speculate this was done deliberately in order to ‘read the room’ before the official announcement.

This came to a head when the Office for Budget Responsibility (OBR) mistakenly leaked the entire Budget before the announcement. The deputy speaker Nusrat Ghani criticised the leak as a serious and “unprecedented” breach of parliamentary procedure, just as Rachel Reeves was about to begin her statement. 

While the Budget has been a source of anxiety for many landlords and property investors, there was a surprising lack of new policies that directly impact them, which is positive news. 

Despite some leaks claiming otherwise, the Budget did not introduce National Insurance on landlords’ rental income.

In this article, we have focused on breaking down the most significant policy that will affect landlords.

2% addition to tax on rental income

The part of the announcement that will affect landlords most is the rate of income tax on rental property income, which will increase by two percentage points from April 2027.

Here is a brief breakdown how income tax payable on property-related income will increase across each band:

  • Basic rate (taxable income of £12,571 to £50,270) – 22%
  • Higher rate (taxable income of £50,271 to £125,140) – 42%
  • Additional rate (taxable income of over £125140) – 47%

High Value Council Tax Surcharge

Reeves also announced that there would be an annual banded council tax surcharge for the highest value properties in the UK. This would affect a statistically small portion of private landlords as well as residential owner-occupiers. This policy will be introduced in April 2028.

  • For properties valued over £2 million, the surcharge will be £2,500.
  • For properties valued over £5 million, the surcharge will be £7,500.

For any property owner whom this surcharge would apply to, the additional costs would be relatively small compared to the high value of their property.

As is often the case, Labour will likely clarify aspects of the Budget in a press release sometime after this initial announcement. Stay tuned for more updates.