Property Income- Property Tax Rises

In recent years landlords have been hit hard by tax changes, and the November 2025 Budget dealt a further blow.

If you are an unincorporated landlord you will face a tax hike from 6 April 2027. From that date, property income will be taxed at the new property tax rates which are two percentage points higher than the standard income tax rates. For 2027/28 onwards, unincorporated landlords will pay tax on the profits of their property rental business at 22% where they fall within the basic rate band, at 42% where they fall in the higher rate band and at 47% where they fall within the additional rate band.

The Renters Rights Act 2025 will limit a landlord’s ability to increase rent, and landlords may wish to consider rent rises ahead of the Act coming into effect where possible to mitigate the impact of the rise.

Corporate landlords are not affected by the increase in the property tax rates, but if you are a corporate landlord and you extract profits in the form of dividends, you will be hit by the increases in the dividend tax rates applying from 6 April 2026. If you have retained profits, you may wish to consider extracting them before the end of the tax year to benefit from the current rates, which for basis and higher rate taxpayers are 2% lower.

If you are a landlord, contact us to discuss the impact of the tax rises on your business.