The Chancellor's Autumn Budget did not deliver the sweeping reforms to property taxation that many commentators had anticipated. There were no changes to residential stamp duty (SDLT) rates, no increases to capital gains tax rates and no further surcharges for second homes. However, several targeted measures will affect landlords, property investors and corporate property structures.

Relief for residential tenants

In what was a technical change, the Budget confirmed the removal of SDLT charges that could have arisen on certain assured tenancies following changes introduced by the Renters' Rights Act. This simplifies the position for tenants and removes an unexpected compliance burden.

Higher taxes for landlords

The most notable long-term change for individuals is a further increase in the tax rates applied to property income from 6 April 2027. Whenever new taxes are introduced, it is a familiar path that they tend to get introduced at a high threshold and a low rate, but over time the threshold falls and the rate rises.  The government has doubled the proposed rates from 2% to 4% above standard rates even before the initial introduction of the new property tax. Property income in England, Wales and Northern Ireland will be taxed at:

• 24% (basic rate)

• 44% (higher rate)

• 49% (additional rate)

I like to measure the effect on a typical small, buy-to-let landlord.  In my example I use someone who:

• Is employed on a salary of £95,000 per annum

• Has 2 buy-to-let properties bringing in £30,000 of rental income

• Has mortgage interest of £20,000, other costs of £5,000 and thus a rental profit of £5,000

• The tax bill on his rental income has risen from £10,000 (200%) to £11,000 (220%)

This continues the trend of increasing the tax burden on private landlords, likely encouraging some investors to revisit the benefits of corporate ownership. However, as noted in previous articles, this remains a complex, risky, and potentially expensive exercise.

Higher charges for expensive properties

The Government also confirmed details of the High Value Council Tax Surcharge, often referred to as a "mansion tax". From April 2028, properties valued at £2 million or more will be subject to additional annual charges. At the same time, Annual Tax on Enveloped Dwellings (ATED) charges will increase by 3.5% in line with inflation.

Conclusion

Surprisingly, it is hard to call this Budget a direct attack on landlords despite the increases set out above. Compared to recent Chancellors, the current incumbent has largely spared the buy-to-let sector from the worst of it. This is likely as much an indication that the government has finally recognized the damaging effect recent tax and regulatory changes have had on the housing market as it is a desire to treat landlords more softly.

It is also true that as more buy-to-let landlords are driven from the market, changes to the tax regime affect fewer people, meaning they bring in less revenue than before.