Chancellor to Raise Tax on Rental Income from 2027

With the Chancellor announcing a major shake-up to landlord taxation, new property-specific income tax rates will be introduced from April 2027. Rental income from land and buildings will be taxed separately under a new property tax regime, with rates set at:

• 22% property basic rate
• 42% property higher rate
• 47% property additional rate

Mortgage interest relief for unincorporated landlords will also be fixed at the new 22% property basic rate, replacing the current system.

There are growing concerns about the knock-on impact a 2% rise may have on tenants, particularly if more landlords choose to leave the rental market. The changes will apply across England, Wales and Northern Ireland, and are expected to raise £600 million per year, affecting hundreds of thousands of landlords nationwide.

If you’re unsure how these changes may affect your rental profits, tax planning, or property strategy, call us today – we can help you assess the impact and plan ahead.