Autumn Budget 2026: Landlords hit by 4% income tax hike from 2027 – Mortgage Strategy
Landlords will pay 4% extra income tax on rental income from 2027, according to chancellor John Healey in his Autumn Budget today.
A 2% hike was already in place thanks to former chancellor Rachel Reeves, and Healey today added an additional 2% increase.
The changes mean that, from 2027 to 2028, the property basic rate will be 24%, the higher rate will be 44% and the property additional rate will be 49%.
The Office for Budget Responsibility said the income tax hike would raise £455m by the 2031-32 tax year.
These rates will apply across England, Wales and Northern Ireland.
Tony Hall, head of business development at Saffron for Intermediaries, said: “Last year’s increase has yet to take effect, and the Chancellor has already doubled it. Raising property income tax rates to 24%, 44% and 49% from April 2027 adds yet more pressure on landlords already navigating rising costs and substantial regulatory change.
“The government describes this as fair and proportionate, but landlords will judge it against the cost of providing a home. Maintenance, repairs, safety checks and property improvements all need funding. Taking more of the income leaves less available to reinvest.”
Neal Groves, head of personal tax at Kinbrook Group’s Beavis Morgan, said: “Landlords are already facing rising costs, higher mortgage payments and increasing demands to maintain safe, quality homes.
“This extra 2 percentage points in tax on rental income risks piling further pressure on landlords whose margins are already stretched. The consequences could be fewer landlords investing in their properties, more choosing to sell up, and reduced availability of homes to rent. The government must recognise that landlords cannot absorb endless cost increases without consequences for the supply, quality and affordability of rental housing.”
The chancellor also used the Budget to reveal more details about the Your First Home scheme, which will be taking applications from February 2027.
