Budget 2026: Landlord Tax Rates to Hit 49% from April 2027

Editor's note: This brief was summarised by The Property AI Team from a report by Property Industry Eye. Read the original article for full details.

Budget 2026: Landlord Tax Rates to Hit 49% from April 2027

Property income tax rates will rise to 24% for basic-rate taxpayers, 44% for higher-rate taxpayers and 49% for additional-rate taxpayers from April 2027, under measures announced in the Budget. The changes apply across the UK apart from Scotland, and sit alongside a new 100% Council Tax premium on homes left empty and unoccupied for at least twelve months.

What the Budget means for landlords

According to the report, the Treasury describes the new property income tax rates as fair and proportionate. The article notes that the predictable consequence is that more private buy-to-let landlords will sell their investments, reducing the supply of rental properties further and putting upward pressure on rents.

The report also states that the private rented sector accounts for 19% of homes, or 4.7 million properties, significantly more than socially rented housing, which represents 16%, or 4.1 million homes.

On the Council Tax premium, the article notes that it remains unclear precisely what exemptions will apply when a property remains vacant for legitimate reasons beyond its owner's control.

Stamp duty unchanged

Stamp duty has been left unchanged in the Budget. The report describes this as a missed opportunity to get the housing market moving again, with buyers continuing to pay for the privilege of changing address.

First Home scheme

The Chancellor has allocated £4.7bn to a new First Home scheme, promising 20% equity loans intended to help around 70,000 households. Deposits start at 2.5%, subject to income limits and regional price caps, while developers are expected to contribute towards the cost. The report compares the scheme to Help-to-Buy, noting that previous interventions have often been too limited in scope to make a discernible difference. Affordable housing receives another £1.5bn.