Budget delivers further tax blow Chancellor grabs more from rental income Private residential property investors face a further two-percentage-point increase in tax on rental income following Chancellor John Healey’s first Budget, taking the combined increase over two Budgets to four percentage points from April 2027. While the Chancellor announced additional support for social and affordable housing, including VAT relief on qualifying land sales to social housing providers and cheaper borrowing for councils, there were no new tax incentives for private landlords or concessions on stamp duty. The latest increase, announced today, comes on top of the two-percentage-point rise announced in November 2025. Together, the measures will take the basic, higher and additional property income tax rates to 24%, 44% and 49% respectively. The main announcements affecting residential property investment include: • A further two-percentage-point increase in property income tax from April 2027. • No reduction in the stamp duty surcharge on additional residential properties. • No new incentives to encourage buy-to-let investment or expand private rental supply. • VAT relief on qualifying land sales to social housing providers. • Additional funding for social and affordable housing development. • Cheaper borrowing for councils investing in housing. • Removal of biodiversity requirements for qualifying brownfield development sites. • No major changes to building regulations for the remainder of this Parliament, except where necessary for safety. The Chancellor also confirmed £4.7bn of government-backed lending for the Your First Home equity loan scheme, supporting eligible first-time buyers purchasing new-build properties from next spring. However, the Office for Budget Responsibility’s forecast of just 1% economic growth in 2027 has added to uncertainty over the wider investment outlook. Elliot Castle, CEO of Castle Property Group, questioned the Government’s approach to private landlords. “You have to ask, does this government even want private landlords? “This is another nail in the coffin for the sector which has been targeted again and again. “In two years, landlords have had a higher stamp duty surcharge on purchases, the end of Section 21, a raft of new rules, regulations and costs under the Renters’ Rights Act and now more tax on the income they earn from their properties. “Landlords aren’t a bottomless pit that the government can keep raiding. This tax lands on ordinary, hard-working people who might have inherited a property or bought a second one to top-up their income or fund their retirement.” Castle warned that additional costs could encourage landlords to sell their properties or seek higher rents. “Private landlords house millions of people in this country. The government can’t keep treating them as an easy target for revenue and then wonder why rent prices are rising and rental supply keeps shrinking.” Meanwhile, Jennifer Lawler, Director of Operations at Elite Realty Invest, welcomed the prospect of greater regulatory stability but questioned whether the Budget would encourage private capital into UK residential development. Lawler argued that private investment remained essential to the Government’s housing ambitions, particularly in regional cities benefiting from employment growth, regeneration and strong tenant demand. She called for a commitment to keep property taxation stable for the remainder of this Parliament to encourage longer-term investment. James Donohue, Managing Director of Landlord Property Exchange, urged the Government to abolish stamp duty on transactions between landlords where tenants remain in place. “Here at Landlord Property Exchange, we focus mainly on properties where tenants are in situ and I would be keen to see stamp duty abolished for tenanted sales. This would incentivise more people to explore this route, which crucially keeps tenants in their homes and is a win-win for all parties.” Donohue argued that encouraging tenanted property sales could help maintain rental supply, avoid unnecessary evictions and provide purchasers with rental income from completion. The Budget’s combination of higher property income taxation and additional support for affordable housing is likely to intensify debate over the role of private investment in meeting the Government’s housing ambitions. – Budget delivers further tax blow
Budget delivers further tax blow Chancellor grabs more from rental income Private residential property investors face a further two-percentage-point increase in tax on rental income following Chancellor John Healey’s first Budget, taking the combined increase over two Budgets to four percentage points from April 2027. While the Chancellor announced additional support for social and affordable housing, including VAT relief on qualifying land sales to social housing providers and cheaper borrowing for councils, there were no new tax incentives for private landlords or concessions on stamp duty. The latest increase, announced today, comes on top of the two-percentage-point rise announced in November 2025. Together, the measures will take the basic, higher and additional property income tax rates to 24%, 44% and 49% respectively. The main announcements affecting residential property investment include: • A further two-percentage-point increase in property income tax from April 2027. • No reduction in the stamp duty surcharge on additional residential properties. • No new incentives to encourage buy-to-let investment or expand private rental supply. • VAT relief on qualifying land sales to social housing providers. • Additional funding for social and affordable housing development. • Cheaper borrowing for councils investing in housing. • Removal of biodiversity requirements for qualifying brownfield development sites. • No major changes to building regulations for the remainder of this Parliament, except where necessary for safety. The Chancellor also confirmed £4.7bn of government-backed lending for the Your First Home equity loan scheme, supporting eligible first-time buyers purchasing new-build properties from next spring. However, the Office for Budget Responsibility’s forecast of just 1% economic growth in 2027 has added to uncertainty over the wider investment outlook. Elliot Castle, CEO of Castle Property Group, questioned the Government’s approach to private landlords. “You have to ask, does this government even want private landlords? “This is another nail in the coffin for the sector which has been targeted again and again. “In two years, landlords have had a higher stamp duty surcharge on purchases, the end of Section 21, a raft of new rules, regulations and costs under the Renters’ Rights Act and now more tax on the income they earn from their properties. “Landlords aren’t a bottomless pit that the government can keep raiding. This tax lands on ordinary, hard-working people who might have inherited a property or bought a second one to top-up their income or fund their retirement.” Castle warned that additional costs could encourage landlords to sell their properties or seek higher rents. “Private landlords house millions of people in this country. The government can’t keep treating them as an easy target for revenue and then wonder why rent prices are rising and rental supply keeps shrinking.” Meanwhile, Jennifer Lawler, Director of Operations at Elite Realty Invest, welcomed the prospect of greater regulatory stability but questioned whether the Budget would encourage private capital into UK residential development. Lawler argued that private investment remained essential to the Government’s housing ambitions, particularly in regional cities benefiting from employment growth, regeneration and strong tenant demand. She called for a commitment to keep property taxation stable for the remainder of this Parliament to encourage longer-term investment. James Donohue, Managing Director of Landlord Property Exchange, urged the Government to abolish stamp duty on transactions between landlords where tenants remain in place. “Here at Landlord Property Exchange, we focus mainly on properties where tenants are in situ and I would be keen to see stamp duty abolished for tenanted sales. This would incentivise more people to explore this route, which crucially keeps tenants in their homes and is a win-win for all parties.” Donohue argued that encouraging tenanted property sales could help maintain rental supply, avoid unnecessary evictions and provide purchasers with rental income from completion. The Budget’s combination of higher property income taxation and additional support for affordable housing is likely to intensify debate over the role of private investment in meeting the Government’s housing ambitions. – Budget delivers further tax blow
Budget delivers further tax blow Chancellor grabs more from rental income Private residential property investors face a further two-percentage-point increase in tax on rental income following Chancellor John Healey’s first Budget, taking the combined increase over two Budgets to four percentage points from April 2027. While the Chancellor announced additional support for social and affordable housing, including VAT relief on qualifying land sales to social housing providers and cheaper borrowing for councils, there were no new tax incentives for private landlords or concessions on stamp duty. The latest increase, announced today, comes on top of the two-percentage-point rise announced in November 2025. Together, the measures will take the basic, higher and additional property income tax rates to 24%, 44% and 49% respectively. The main announcements affecting residential property investment include: • A further two-percentage-point increase in property income tax from April 2027. • No reduction in the stamp duty surcharge on additional residential properties. • No new incentives to encourage buy-to-let investment or expand private rental supply. • VAT relief on qualifying land sales to social housing providers. • Additional funding for social and affordable housing development. • Cheaper borrowing for councils investing in housing. • Removal of biodiversity requirements for qualifying brownfield development sites. • No major changes to building regulations for the remainder of this Parliament, except where necessary for safety. The Chancellor also confirmed £4.7bn of government-backed lending for the Your First Home equity loan scheme, supporting eligible first-time buyers purchasing new-build properties from next spring. However, the Office for Budget Responsibility’s forecast of just 1% economic growth in 2027 has added to uncertainty over the wider investment outlook. Elliot Castle, CEO of Castle Property Group, questioned the Government’s approach to private landlords. “You have to ask, does this government even want private landlords? “This is another nail in the coffin for the sector which has been targeted again and again. “In two years, landlords have had a higher stamp duty surcharge on purchases, the end of Section 21, a raft of new rules, regulations and costs under the Renters’ Rights Act and now more tax on the income they earn from their properties. “Landlords aren’t a bottomless pit that the government can keep raiding. This tax lands on ordinary, hard-working people who might have inherited a property or bought a second one to top-up their income or fund their retirement.” Castle warned that additional costs could encourage landlords to sell their properties or seek higher rents. “Private landlords house millions of people in this country. The government can’t keep treating them as an easy target for revenue and then wonder why rent prices are rising and rental supply keeps shrinking.” Meanwhile, Jennifer Lawler, Director of Operations at Elite Realty Invest, welcomed the prospect of greater regulatory stability but questioned whether the Budget would encourage private capital into UK residential development. Lawler argued that private investment remained essential to the Government’s housing ambitions, particularly in regional cities benefiting from employment growth, regeneration and strong tenant demand. She called for a commitment to keep property taxation stable for the remainder of this Parliament to encourage longer-term investment. James Donohue, Managing Director of Landlord Property Exchange, urged the Government to abolish stamp duty on transactions between landlords where tenants remain in place. “Here at Landlord Property Exchange, we focus mainly on properties where tenants are in situ and I would be keen to see stamp duty abolished for tenanted sales. This would incentivise more people to explore this route, which crucially keeps tenants in their homes and is a win-win for all parties.” Donohue argued that encouraging tenanted property sales could help maintain rental supply, avoid unnecessary evictions and provide purchasers with rental income from completion. The Budget’s combination of higher property income taxation and additional support for affordable housing is likely to intensify debate over the role of private investment in meeting the Government’s housing ambitions. – Budget delivers further tax blow
