Autumn Budget 2026: What It Means for Landlords

Updated: 28 October 2026

TLDR: Chancellor John Healey delivered the Autumn Budget on Wednesday 28 October 2026. He is adding a further two percentage points to property income tax from April 2027, on top of last year's rise, so a basic-rate landlord's rate goes from 20% today to an expected 24%. Capital gains tax, dividend tax and National Insurance were left alone, and limited companies aren't affected. Making Tax Digital extends to landlords with qualifying income over £30,000 from the same month.

Budget week is never relaxing if you're a landlord. It isn't the Budget most landlords were hoping for, so let's go through what it means for you and what's worth doing now.

Related: How to Set Rent Under the Renters' Rights Act

What did the Budget change for landlords?

Here's every tax change coming for landlords, including the ones set last year.

Property income tax rises a further two points

From 6 April 2027, individual landlords are expected to pay 24%, 44% or 49% on rental profit, four points above the 20%, 40% and 45% charged on wages and pensions. Rachel Reeves announced the first two points rise in her November 2025 Budget and Parliament legislated for it in the Finance Act 2026. Healey has added another two points. Landlords who own through a limited company pay corporation tax and are not affected. Scotland and Wales are being given the power to set their own property income rates.

Maths time! For £10,000 of taxable rental profit, a basic-rate landlord pays £2,000 today and around £2,400 from April 2027. A higher-rate landlord goes from £4,000 to around £4,400. That's a fifth more tax on the same profit at the basic rate, and a tenth more at the higher rate.

Mortgage interest relief and your Personal Allowance

Landlords with a mortgage get a tax credit on their interest instead of deducting it. Under the law passed this year, that credit is given at the property basic rate, so last year's rise already lifted it from 20% to 22%. If it follows the new basic rate, it would rise to 24%, which would soften the blow for mortgaged landlords. We're confirming this against the full Budget documents.

HMRC will also set the Personal Allowance against employment, trading or pension income first, so landlords with a salary or pension will see more of their rental profit taxed at the new rates.

Making Tax Digital threshold falls to £30,000 income

Making Tax Digital, which means keeping your records in approved software and sending HMRC a short update every quarter, is already live for landlords whose qualifying income is over £50,000. Qualifying income means your gross rent plus any self-employment income, before expenses. From April 2027 the threshold falls to £30,000.

What didn't change?

High Value Council Tax Surcharge introduced for homes over £2 million

The High Value Council Tax Surcharge, an annual charge on top of council tax for homes in England worth £2 million or more, starts in April 2028. The owner is liable, not the occupier, so if you let a £2 million home, the bill comes to you rather than your tenant.

Capital gains unchanged for landlords

If you're thinking of selling, the capital gains news is a relief. The only change on capital gains was a cut to Business Asset Disposal Relief, from £1 million to £500,000 over a lifetime, and that relief rarely applies to rental property.

National Insurance on rent, which has been floated before, didn't appear. And with dividend tax untouched, landlords who own through a company and pay themselves in dividends escape both rises.

Will the Budget push rents up?

Not directly, and not overnight. Under the Renters' Rights Act, landlords can raise rent once a year through the Section 13 process, and if a tenant challenges the increase, the First-tier Tribunal looks at the open-market rent for the property. It does not consider your tax bill or your mortgage.

Nobody enjoys a price hike. Landlords tend to absorb tax rises in the short term and price them into new tenancies where the market allows. Landlords who set the rent accurately at the start of each tenancy are better placed than those relying on increases later. How to set rent under the Renters' Rights Act covers how.

What in the Budget helps tenants?

Not everything in the Budget is about landlords' tax bills, and some of it should make it a little easier for tenants to lower household costs.

• A £100 household energy payment this winter for households in council tax bands A to D in England, paid from January 2027.
• Gas standing charges scrapped from 2027. The Treasury estimates around six in ten households will save about £45 a year.
• Zero VAT on household electricity, extended to July 2027.
• The National Living Wage going up 3.9% from April 2027.

On their own these are small amounts, but for a tenant on a tight budget they can be the difference between a bill paid on time and a difficult month.

We were all hoping for a change to the LHA rates. Instead we got Your First Home, the Prime Minister's scheme letting first-time buyers of new-build homes put down a 2.5% deposit with a 20% equity loan. If it takes off, some of your tenants may become buyers.

In our opinion it would have been much better to up the LHA rates. They have been frozen since April 2024 and are still based on rents from September 2023. The ONS puts average UK rents 3.8% higher in the year to September 2026 alone, so every month the freeze continues, the gap between what Universal Credit covers and what rent costs gets wider, and tenants fill it from their own pockets. No change announced. Disappointing.

Does a limited company make more sense for landlords now?

For some landlords, it might. Company landlords pay corporation tax on rental profit, so neither rise touches them, and the Budget left dividend tax alone. The gap between owning personally and owning through a company is now noticeably wider.

Moving properties you already own into a company usually triggers capital gains tax and stamp duty, though, and company mortgages can cost more. That makes it a decision for a property tax specialist rather than a reaction to one Budget.

What should landlords do now?

Nothing changes until April 2027, so there's time to plan.

• Rework the numbers on each property at the new rates, including whether your rental profit now pushes you into a higher band.
• If you have a mortgage, check how much of the rise your interest relief offsets once the relief rate is confirmed.
• If you're considering a limited company, speak to a property tax specialist before you move anything.
• If your qualifying income is over £30,000, choose Making Tax Digital software before April 2027.
• Check your allowable expenses. Landlord insurance premiums count against rental income.
• Price your next new tenancy with your full costs in mind.

Husmus tip: If the rise squeezes your margin, look at what you pay to protect each property. Rent Shield costs 3.5% of the annual rent, with a minimum of £400 a year, and you can absorb it or build it into the rent. Our guide to rent guarantee insurance explains the cover.

It's been a tough couple of Budgets for landlords. If you'd like help making the numbers work, from pricing your next tenancy to protecting the rent, we're here.

Frequently asked questions

What are the new property income tax rates?

From 6 April 2027, individual landlords are expected to pay 24%, 44% or 49% on rental profit, against 20%, 40% and 45% now. That combines last year's two-point rise with a further two points announced in Budget 2026.

Did capital gains tax go up for landlords?

No. Rates on residential property stay at 18% and 24%, after a £3,000 annual allowance.

Do limited company landlords pay the new rates?

No. Companies pay corporation tax on rental profits, and the Budget left dividend tax unchanged.

Does the Budget affect landlords in Scotland and Wales?

Scotland and Wales are being given the power to set their own property income tax rates, so check the rates where your property is. Capital gains tax is UK-wide, and the £2 million council tax surcharge applies in England only.

Make the numbers work. With Husmus tenant assessments and Rent Shield, you protect the income those numbers depend on. Find out how it works →

Updated 28 October 2026, after the Budget speech. This article does not constitute tax advice. Speak to an accountant about your own position.