The Autumn Budget 2026, delivered on 28 October 2026, makes landlords pay more on rental profits from 6 April 2027. Budget 2025 had already given property income its own tax rates from that date; Budget 2026 raises them by a further two points. It also confirms a new surcharge on high-value homes in England from April 2028 and eases Making Tax Digital for landlords joining in April 2027. For every other measure, see our Autumn Budget 2026 summary.
What changed at a glance
| Measure | Before | After | From |
|---|---|---|---|
| Property income tax rates (basic / higher / additional) | 20% / 40% / 45% today; 22% / 42% / 47% previously set for April 2027 by Finance Act 2026 | 24% / 44% / 49% | 6 April 2027 |
| Finance cost relief (mortgage interest) | 20% | 24% | 6 April 2027 |
| High Value Council Tax Surcharge, England | none | £2,500 to £7,500 a year on homes worth £2 million or more | April 2028 |
| Making Tax Digital, April 2027 joiners | penalty points from the first late update | no penalty points on the first four quarterly updates of 2027-28 | 6 April 2027 |
Rental profits: new property rates of 24%, 44% and 49%
From 6 April 2027 property income stops being taxed at the main income tax rates and gets its own: 24% in the basic rate band, 44% in the higher rate band and 49% in the additional rate band. The red book sets these rates for England, Wales and Northern Ireland.
Relief for mortgage interest and other finance costs is still given as a tax reduction at the property basic rate, so it rises to 24% from the same date. A higher rate landlord therefore still pays tax on rental profit at 44% but gets relief on finance costs at 24%.
The rental income tax calculator shows your tax under the 2026-27 rules and what the April 2027 rates do to it.
The Trading Allowance goes up from £1,000 to £3,000 from April 2027, but the separate £1,000 property allowance is not part of that change.
High Value Council Tax Surcharge (England)
From April 2028, owners of homes in England worth £2 million or more pay an annual surcharge on top of council tax, with the first bills in March 2028:
| Property value | Annual surcharge |
|---|---|
| £2 million to £2.5 million | £2,500 |
| £2.5 million to £3.5 million | £3,500 |
| £3.5 million to £5 million | £5,000 |
| £5 million or more | £7,500 |
The owner pays, not the tenant. The charges rise with CPI from 2029-30. Owners with household income of £35,000 or less, capital of £16,000 or less, or a household member who meets disability criteria can defer the charge, with interest, until the property changes hands.
Making Tax Digital
Landlords and sole traders whose qualifying income on their 2025-26 return is over £30,000 must start Making Tax Digital for Income Tax on 6 April 2027; that threshold is unchanged. Budget 2026 adds a soft landing: if you join in April 2027, you get no late-submission penalty points on your first four quarterly updates for 2027-28. Penalties for missing the tax return deadline still apply. Use the MTD checker to see whether and when you are in.
Capital Gains Tax and Stamp Duty
Capital Gains Tax on residential property is unchanged for 2027-28: 18% on gains within your basic rate band and 24% above it, with a £3,000 annual exempt amount. Budget 2026 announces no change to the Stamp Duty Land Tax rates. The Capital Gains Tax calculator works out the tax on a sale.
What to do now
- Work out your rental tax for 2027-28 in the rental income tax calculator, which shows the April 2027 property rates against today’s.
- Check whether MTD applies to you from April 2027 with the MTD checker, and choose software before your first quarterly update.
- If you own a home in England worth around £2 million or more, note the surcharge from April 2028 and the deferral options above.
Summary
From 6 April 2027 landlords in England, Wales and Northern Ireland pay 24%, 44% or 49% on rental profits, with finance cost relief at 24%. A High Value Council Tax Surcharge of £2,500 to £7,500 a year applies to homes in England worth £2 million or more from April 2028. Capital Gains Tax on property is unchanged, and landlords joining MTD in April 2027 get a penalty-free first year for quarterly updates.