Tax on rental profit goes up again from April 2027, while capital gains tax and stamp duty stay the same. Here's what it means in pounds.
Updated 28 October 2026
The short version
- Tax on rental profit rises again. From 6 April 2027 it will be 24%, 44% and 49%, not the 22%, 42% and 47% announced a year ago. That's four points above the rates on wages.
- Mortgage interest relief stays tied to the property basic rate, so the Section 24 credit rises to 24%.
- Capital gains tax is unchanged at 18% and 24%, with the same £3,000 allowance.
- Stamp duty is unchanged, including the 5% surcharge on additional homes.
- Tax on savings interest also rises to 24%, 44% and 49% from April 2027, which matters if you sell and hold the cash. The £20,000 ISA allowance stays.
- The freeze on Local Housing Allowance wasn't lifted.
Work it out for your property. What will I keep after tax? · Sell now or keep it?
The new rates at a glance
| Rate on rental profit | 2026/27 | 2027/28 as planned | 2027/28 after the Budget |
|---|---|---|---|
| Basic rate | 20% | 22% | 24% |
| Higher rate | 40% | 42% | 44% |
| Additional rate | 45% | 47% | 49% |
| Mortgage interest credit | 20% | 22% | 24% |
The rates apply in England, Wales and Northern Ireland. Scotland and Wales can set their own property rates. The tax bands and the £12,570 personal allowance don't change, and from April 2027 the allowance is set against your wages, self-employment and pension income before your rental profit. The extra two points will be legislated in the Finance Bill 2026-27.
What it costs you
Tax on the rental profit, after the mortgage interest credit, for three landlords who own in their own name. Rental profit is the rent less running costs, before mortgage interest.
| Landlord | 2026/27 | 2027/28 as planned | 2027/28 now | Rise |
|---|---|---|---|---|
| £25k salary, £10k profit, £4k interest | £1,200 | £1,320 | £1,440 | +£240 |
| £60k salary, £12k profit, £8k interest | £3,200 | £3,280 | £3,360 | +£160 |
| £60k salary, £20k profit, £8k interest | £6,400 | £6,640 | £6,880 | +£480 |
As a rule of thumb, you pay about £400 more a year for every £10,000 of rental profit, less 4% of your mortgage interest. Landlords with big mortgages lose less, because the credit on their interest rises too. Put your own figures into the Section 24 calculator, which now uses the new rates.
Capital gains tax: no change
CGT on residential property stays at 18% within your unused basic rate band and 24% above it, after a £3,000 allowance per person. You still report and pay within 60 days of completion. The Budget cut the Business Asset Disposal Relief limit from £1 million to £500,000 and announced a new Founders' Relief, but neither applies to selling an ordinary buy-to-let. See what you'd pay on a sale.
Selling and holding the cash
Savings interest is taxed at 24%, 44% and 49% from April 2027, the same as rental profit. If you sell and leave the proceeds in a bank, the interest is taxed more heavily than before. The ISA allowance stays at £20,000 a year per person, so a couple can shelter £40,000 a year. Compare selling with keeping in the sell or keep calculator, and see how fast an ISA grows with the ISA and savings tax calculator on Everyday Sums.
What else to note
- Stamp duty is unchanged. Additional homes still pay 5% on top in England and Northern Ireland. Check a purchase with the stamp duty calculator.
- Companies aren't affected by the property rates. Corporation tax stays at 19% to 25% and dividend rates are unchanged, so the gap between owning personally and through a company widens. Compare both in the limited company calculator.
- Local Housing Allowance stays frozen, so tenants on Universal Credit get no help with rent rises.
- High Value Council Tax Surcharge: homes worth £2 million or more face an extra charge from April 2028, as announced last year.
- Already coming: Making Tax Digital for landlords with income over £30,000 from April 2027, and the landlord database at £65 per property per year.
What to do now
- Rerun your numbers in the Section 24 calculator with your 2027/28 rent and costs.
- Look at ownership. If a spouse or partner pays tax at a lower rate, a change in the ownership split can cut the total bill. Work it out with the rental income split calculator. It needs a declaration of trust and legal advice.
- Review the rent. Check yours against the local average and see how tribunals treat rises in our rent tribunal tracker before serving a Form 4A.
- Thinking of selling? CGT hasn't changed, so there's no Budget reason to rush a sale. The question is what you keep from the rent each year against what the property might grow by.
For the Budget changes outside property, such as pensions and the State Pension, see the Autumn Budget 2026 guide on Everyday Sums.
Questions landlords ask
What did Budget 2026 change for landlords?
It raised the tax rates on rental profit from April 2027 to 24%, 44% and 49%, two points more than announced in 2025. The mortgage interest credit rises to 24%. Capital gains tax and stamp duty didn't change.
When do the new property tax rates start?
On 6 April 2027, the start of the 2027/28 tax year. They apply in England, Wales and Northern Ireland. Scotland and Wales can set their own property rates.
How much more tax will I pay?
About £400 a year more than today for every £10,000 of rental profit, less 4% of your mortgage interest. A basic-rate landlord with £10,000 of profit and £4,000 of interest pays about £240 more.
Did capital gains tax go up in the Budget?
No. It stays at 18% and 24% on residential property, with a £3,000 annual allowance. You still have 60 days from completion to report and pay.
Do the new rates apply to limited companies?
No. Companies pay corporation tax at 19% to 25% and can deduct mortgage interest in full. Dividend rates were also unchanged.