From 6 April 2027, property income carries its own rates of income tax, two percentage points above the rates on employment and trading income. They will be 22%, 42% and 47%, announced at the Autumn Budget 2025 and applying to English and Northern Irish taxpayers. What has not yet been confirmed by HMRC is whether the Non-Resident Landlord Scheme withholding follows the new basic rate of 22%. This page separates what is settled from what is not.
What is confirmed
The personal allowance is also to be set against employment, trading and pension income before property income, which matters to anyone with a mixed income, because the allowance is used up on the lower taxed income first.
| Band | Rate on property income from 6 April 2027 | Rate on employment income |
|---|---|---|
| Basic | 22% | 20% |
| Higher | 42% | 40% |
| Additional | 47% | 45% |
What is not confirmed, and why we are saying so
The Non-Resident Landlord Scheme deduction is pegged to the basic rate. Whether it follows the new property income basic rate of 22%, or stays at 20% because the scheme's reference is to the general basic rate, has not yet been confirmed by HMRC.
A good deal of commentary assumes it will follow. It may well. We are not going to state it as a fact on the strength of an assumption, because the landlords reading this page are making decisions with real money and a wrong figure is worse than an honest gap.
We will check HMRC's guidance again before the 2027 to 2028 tax year and update this page. The review date at the top of the page tells you when we last looked.
What is worth doing now, and what is not
Worth doing: making sure your expenses are properly recorded and claimed, because a two point rise on a smaller taxable figure costs less than a two point rise on a larger one. Making sure your agent knows about costs you pay yourself, since the withholding is calculated after allowable expenses. And if you have been meaning to apply for gross payment, doing it before the change rather than during it.
Not worth doing: restructuring on the strength of a two point rise alone. Moving a property into a company has its own costs, including Stamp Duty and a possible capital gain on transfer, and the arithmetic rarely turns on two points. That is a conversation for an accountant with your figures in front of them, not a decision to take from a web page.
Questions we are asked
What are the new property income tax rates?
22% basic, 42% higher and 47% additional, from 6 April 2027, announced at the Autumn Budget 2025 and applying to English and Northern Irish taxpayers.
Will the tax deducted from my rent rise to 22%?
That has not yet been confirmed by HMRC. The scheme's withholding is pegged to the basic rate, and whether it follows the new property income basic rate is an open question. We will update this page before the 2027 to 2028 tax year.
Does the rise apply to non-resident landlords as well?
The rates apply to property income, so a non-resident landlord with UK property income is within them in the same way as a UK resident, subject to any relief under a double taxation treaty.
Should I move my property into a company?
That is a question for an accountant with your figures. The transfer itself can trigger Stamp Duty and a capital gain, and the arithmetic rarely turns on a two point change alone.
Sources
HM Treasury, Autumn Budget 2025
HMRC, Non-resident Landlords Scheme guidance notes
HMRC Property Income Manual PIM4810
General information about the law and practice in England. Not tax advice or legal advice.
