By Debbie Franklin, Director of Tax and property tax specialist
The Budget 2025 was presented by Rachel Reeves on 26 November 2025. Below we summarise several tax measures that will impact property landlords.
Income Tax
Thresholds frozen until 2031
Rates
Income tax on dividend income
This will increase from 6 April 2026:
- basic rate from 8.75% to 10.75%.
- higher rate from 33.75% to 35.75%.
- additional rate will remain unchanged at 39.35%.
Income tax on property income
The government will create separate Income Tax rates for property income from 6 April 2027.
- basic rate will be 22%.
- higher rate will be 42%.
- additional rate will be 47%.
- Finance cost relief will be provided at the separate property basic rate (22%).
The new rates will apply to taxpayers in England and Northern Ireland.
The Scottish and Welsh governments will be given powers to set rates of property income tax applicable to Scottish and Welsh taxpayers.
Income tax on savings income
Also, from 6 April 2027, the rates of income tax on savings income will increase as follows:
- basic rate from 20% to 22%.
- higher rate from 40% to 42%.
- additional rate from 45% to 47%
Allowances not changed
£500 dividend, £1,000/£500 interest and £1,000 property income
However, from April 2027, personal allowances allocated to the above last, can choose currently!
Corporation Tax
Late filing penalties doubled April 2026
Capital allowances
- Writing down allowance to 14%
- 100% allowance for zero emission cars to April 2027
Capital Gains Tax
- Sale to Employee ownership Trust only 50% exempt Now
- Remaining 50% held over into the Trust
- Incorporation relief claimed not automatic April 2026
- Business Asset Disposal Relief to 18% April 2026
Non UK Residents
- Removal of tax credit for dividends if PA claimed April 2026
- Post departure trade profits removed for temporary non UK residents so <5 years all taxable April 2026
- Abolish Class 2 voluntary for non residents state pension April 2026
Inheritance Tax
- Thresholds frozen to April 2031
- APR/BPR £1m cap for 100% IHT relief transferrable April 2026
- Refreshed every 7 years
- Excluded Property Trusts capped at £5m April 2025!
Employment Taxes
- Working from home £6 scrapped unless paid by employer from April 2026
- EMI scheme expanded criteria April 2026
- Employee car ownership schemes subject to tax April 2030
- Pension salary sacrifice limited to £2,000 from April 2029
- Does not affect employer contributions
- Only really affects NI
Investment Taxes
- ISA limit to remain at £20,000
- Whilst under 65 £8,000 must be stocks and shares
- EIS and VCT Extending criteria April 2026
- VCT reduce the tax credit from 30% to 20 % April 2026
- Requirement for crypto providers to report UK resident users
'Mansion Tax'
From 1 April 2028 a new High Value Council Tax Surcharge (HVCTS) will apply to owners of residential properties in England worth £2 million or more.
The charge will be in addition to the existing Council Tax and will be collected by local authorities.
Properties valued above the £2 million threshold will be placed into bands based on their value. The minimum charge will be £2,500.
Other taxes
- EV charge 3p per mile added to RFL from April 2028
- More tax collection of SA tax via PAYE April 2029
- All Vat invoices to be e-invoices April 2029
- MTD for corporation tax scrapped
Tourism tax
It was also announced that the government will give mayors and potentially other local leaders, the option to introduce a visitor levy on overnight visitor accommodation in their area. This will fund further investment in growth locally, including the visitor economy. The government is consulting on the design of the levy. This measure will apply to England only as similar levies have already been introduced in Scotland and Wales.