Autumn Budget 2025: What it means for landlords & the property sector

Autumn Budget 2025 – What it means for landlords & the property sector

Delivered 26 November 2025

This year’s Autumn Budget includes several significant measures affecting landlords, property investors, developers, holiday-let owners, and corporate property businesses. Below is a concise summary of the key announcements and what they mean for each part of the property sector.

Higher taxes on property income

Separate property income tax rates from April 2027

The government will introduce new, standalone tax bands for rental and property income:

• 22% – Property basic rate
• 42% – Property higher rate
• 47% – Property additional rate

This represents a material increase in property taxation, especially for higher-rate landlords or those with multiple properties.

Reliefs applied after other income (from April 2027)

The personal allowance and certain reliefs will apply to rental, savings and dividend income only after they’ve been applied to employment, pension, and trading income. This will reduce the tax efficiency of rental income for many landlords.

 

Capital Gains Tax & ownership structures

CGT relief on Employee Ownership Trust disposals reduced

For property businesses considering succession via an EOT, the CGT exemption drops from 100% to 50% from 26 November 2025.

Agricultural & Business Property Relief (APR/BPR)

For estates and land-based property businesses, the forthcoming combined £1m APR/BPR allowance remains frozen until 2031. Transferability between spouses applies from April 2026.

 

High-Value Property Surcharge (“Mansion Tax”)

From 2028/29, the new High Value Council Tax Surcharge applies annually:

• £2,500 – properties worth £2m+
• £7,500 – properties worth £5m+

This affects:

• London/South East landlords
• property companies holding prime residential units
• investors with high-value rentals or second homes
• SPVs owning luxury properties

 

Dividends, savings & ISA rules changing

Dividend and savings tax increases (from 2026/27)

Tax on dividends and savings will rise by 2 percentage points for basic and higher-rate bands.

This directly impacts:

• landlords drawing dividends from SPVs
• property companies distributing profits
• investors relying on interest income

ISA reform (from April 2027)

• Cash ISA limit capped at £12,000
• Over-65s retain full £20,000 cash ISA limit
  This may affect cash reserve planning for landlords.

 

What this means for different types of property clients

Buy-to-Let Landlords

Key impacts:

• Higher taxation on rental profits from 2027
• Less tax relief due to the new ordering of allowances
• Increased scrutiny from HMRC
• Rising costs for maintenance contractors due to Construction Industry Scheme (CIS) enforcement
• Potential inconsistency between personal ownership vs. Special Purpose Vehicle (SPV) ownership tax outcomes

Landlords with growing portfolios may benefit from a structure review (LLP, SPV, or hybrid model).

 

Property Developers

Key impacts:

• Potential benefit from the new 40% First-Year Allowance (FYA) on qualifying plant and machinery
• Increased CIS scrutiny and fraud clampdowns
• Higher payroll costs from April 2026 due to NLW/NMW rises
• Increased financing cost pressures if using dividends for extraction
• Soft Drinks Industry Levy expansion may affect mixed-use developments involving Food & Beverage retail tenants

Developers may also be impacted by changes in capital planning and group structuring.

 

Holiday-let & Airbnb owners

Key impacts:

• Higher property income tax rates may significantly reduce profitability
• Many rely on interest-based savings to manage seasonal cashflow, now taxed more heavily
• Potential exposure to high-value surcharge if properties exceed £2m
• Increased compliance requirements under Making Tax Digital (MTD) (see below)
• If operating as a business, potential access to capital allowances on fixtures, Electric Vehicle (EV) chargepoints, equipment etc.

 

Corporate Landlords & Property Companies

Key impacts:

• Dividend tax increases affect extraction strategies
• High-Value Property Surcharge applies to company-owned residential units
• Greater HMRC scrutiny on complex structures, related-party lending and CIS
• Full expensing and FYAs remain relevant for companies investing in infrastructure, plant or non-residential assets
• Changes to salary sacrifice pensions may impact senior leadership remuneration

Corporate landlords with large portfolios should undertake a structural and tax-efficiency review.

 

HMRC Enforcement – Stronger Powers Ahead

The Budget strengthens HMRC’s ability to target:

• under-declared rental income
• property-related avoidance
• offshore property structures
• CIS fraud and subcontractor misuse
• inaccurate reporting by property companies

Accurate bookkeeping, fully declared property income and compliant CIS processes will be crucial.

 

Making Tax Digital (MTD) – Important for All Property Owners

MTD for Income Tax is coming and property owners are in scope

From April 2026 (for income over £50,000) and April 2027 (for income over £30,000): Landlords will need to:

• keep digital records
• submit quarterly updates to HMRC
• complete an End of Period Statement
• file a final declaration

This applies to:

• Buy-to-let landlords
• Holiday-let operators
• Property partnerships
• Individuals with multiple rental sources
• Mixed-income landlords (employment + rental)

MTD will require digital record-keeping and quarterly submissions — a major shift for many landlords.

We can support you with:

• cloud bookkeeping
• digital record-keeping solutions
• quarterly MTD submissions
• ensuring compliance ahead of the start date

 

What property clients should consider now

• Review property ownership structures
• Model tax impact of the new 2027 property rates
• Assess long-term profitability of higher-value properties
• Review rental pricing and cashflow forecasting
• Prepare for MTD record-keeping and software adoption
• Consider incorporation, disincorporation or hybrid models
• Review IHT and succession planning for property-rich estates

 

How We Can Help

Our specialist property team supports:

• landlords (small to large portfolios)
• property developers
• holiday-let and Airbnb owners
• corporate landlord structures and SPVs
• family property groups
• investors and estates

We can advise on:

• tax planning and property income strategies
• SPV structuring and incorporation
• CGT planning and disposals
• IHT and estate planning
• MTD compliance
• capital allowances for property investment
• property business succession planning
• HMRC enquiries and compliance checks

 

If you’d like a tailored review of how the Budget affects your portfolio or business, we’re here to help call us on 01932 830664, email enquiries@wardwilliams.co.uk or visit www.wardwilliams.co.uk