The 2025 Budget delivered some key announcements affecting property, but for most buyers, sellers, and landlords, the changes are either minimal or take effect further down the line. While it’s not a game-changing budget for the housing sector, it’s also far from a damaging one.
Here’s a clear, factual summary of what’s been announced, and what it means for the UK housing and rental markets, including why Martin & Co clients can continue to move forward with confidence.
New high-value property surcharge from 2028
A new High Value Council Tax Surcharge (“mansion tax”) will apply in England to homes valued at £2m+ from April 2028, based on 2026 VOA valuations. It will add £2,500 – £7,500 a year to the existing council tax and is expected to affect about 100,000 homes.
With the lead time built in, there’s no immediate change for those buying or selling property.
No changes to stamp duty or £500k+ ownership
The Autumn Budget did not introduce any new tax for homes valued over £500,000, the only new property levy announced was the high-value council tax surcharge for £2m+ homes from April 2028.
It also left Stamp Duty Land Tax unchanged, with no tweaks to rates or thresholds.
So, while there had been pre-Budget rumours of wider property-tax or stamp-duty reform, these didn’t materialise, meaning the existing moving costs and rules carry forward into 2026.
Rental income tax changes from April 2027
From April 2027, the tax rates on rental (property) income will rise by 2 percentage points in England, Wales and Northern Ireland. That takes the basic rate to 22% (from 20%), the higher rate to 42% (from 40%), and the additional rate to 47% (from 45%). Scotland is not covered by this change, as it sets its own income tax bands.
Relief for commercial and mixed-use landlords
The government has confirmed permanent lower business-rate multipliers for retail, hospitality and leisure properties in England with rateable values under £500,000, due to start from April 2026, replacing the temporary RHL relief.
Why property remains a sound investment
While tax changes are on the horizon, property continues to be one of the most reliable asset classes for long-term investors.
- Rental demand remains high in many areas, driven by demographic shifts and limited housing supply
- Yields remain competitive, particularly in regions with constrained rental stock and strong tenant demand
- Property offers long-term capital growth potential, alongside a consistent income stream
- In uncertain economic conditions, brick-and-mortar assets are often seen as more stable than financial markets
Landlords can continue to secure reliable returns and benefit from the strength of the UK rental market by taking a strategic approach and working with an experienced letting agent like Martin & Co.
Regional impact: Focused on high-value areas
The £2m+ council tax surcharge is expected to fall mainly on London and parts of the South East, where most homes above this threshold are located. Across most UK regions, property values are below £2 million, so direct exposure should be limited. With no changes to stamp duty announced, the wider tax backdrop for movers remains the same going into 2026, supporting continuity in regional markets.
Looking ahead: Legislative focus shifts beyond the Budget
While the Budget announcements set the tone for the years ahead, other key legislation is likely to shape the property market more directly in the near term:
- Renters’ Rights Act – set to progress in 2025/26, this will introduce significant changes to tenancy law. Read our full guide to the Renters’ Rights Act
- Making Tax Digital (MTD) – from April 2026, many landlords and self-employed property owners will need to switch to digital tax reporting. Martin & Co is already prepared to support landlords through this transition.
In summary
Budget 2025 announced housing-related tax changes, but the key measures are not immediate. Stamp duty rates and thresholds were left unchanged. The Budget did not introduce any new residential owner-occupier tax starting at £500,000+. The main new policies begin later, including the £2m+ annual surcharge from April 2028 and a 2 percentage-point rise in rental income tax from April 2027.
Martin & Co supports landlords with expert advice and practical guidance, helping you plan ahead and make the most of a rental market that remains resilient and full of opportunity.
