From 6 April 2027, income tax rates on property income rise by two percentage points: 22% at the basic rate, 42% at the higher rate and 47% at the additional rate, as announced in the Autumn Budget 2025. For a Nottingham landlord with £10,000 of taxable rental profit, that is £200 more tax a year at the basic rate. This page is general information rather than tax advice, and your own position should go to your accountant, but the change is worth planning for now rather than discovering in 2028.
What is changing, and what is not
The change is to the rates on property income specifically, not to the general income tax rates, which is a first: rental profit will be taxed at its own, higher schedule. What has not changed: the restriction of mortgage interest relief to a basic rate credit under section 24, allowable expenses, and the machinery of self assessment. Making Tax Digital for Income Tax also arrives for many landlords from April 2026 onwards by income band, which changes how you report before the 2027 change alters what you pay.
For landlords living abroad there is a further open point: rent paid to a non-resident landlord is currently subject to 20% basic rate withholding under HMRC's Non-Resident Landlord Scheme, and HMRC has not yet confirmed the scheme's treatment of the 2027 rates. Our Overseas landlord management service operates the scheme and will apply whatever HMRC confirms.
Sensible planning, in general terms
Three conversations to have with your accountant before April 2027, stated as topics rather than recommendations: whether your ownership structure still fits, since the rise applies to personally held property income; whether expenses are being captured completely, because every allowable pound matters more at 22% than at 20%; and whether your rent is at market, since the rent increases after the 2025 Act procedure allows one evidenced rise a year. We state figures with dates because tax changes between Budgets; the rates above are as announced in the Autumn Budget 2025 and any later Budget can move them again. General information, not tax advice.
