Landlord Tax Changes April 2026: The Full Round-Up (Autumn Budget 2025 + Spring Statement 2026)

The landlord tax changes April 2026 brings are the most significant the buy-to-let sector has seen since the Section 24 phase-in finished in 2020. Making Tax Digital for Income Tax Self Assessment (MTD ITSA) finally goes live on 6 April 2026 for anyone with gross property or self-employment income above £50,000, the inheritance tax overhaul announced in the Autumn Budget 2024 lands with the £2.5m combined Business Property Relief and Agricultural Property Relief cap, and the Furnished Holiday Let regime — already abolished from 6 April 2025 — has now bedded in with all the joint-ownership headaches that came with it.

On top of that, the Autumn Budget 2025 (delivered by the Chancellor on 26 November 2025) introduced a brand-new "property income tax" schedule with rates 2 percentage points above mainstream income tax — 22%, 42% and 47% — taking effect from 6 April 2027. It also extended the freeze on income tax personal allowances and thresholds through to 2030/31, raised the Section 24 mortgage interest tax credit from 20% to 22% to (partially) offset the 2027 uplift, and confirmed the High Value Council Tax Surcharge — the so-called "mansion tax" — for homes worth £2m or more from April 2028, with the Valuation Office Agency snapshot taken in April 2026.

The Spring Statement 2026 on 3 March 2026 was, by design, a low-key affair: no new tax measures for property, but the Office for Budget Responsibility downgraded 2026 GDP growth to 1.1% and pencilled in housing supply of just 220,000 net additions. This guide pulls every confirmed change into one place, with effective dates, the cash impact on a representative landlord, and exactly what you need to do before each deadline. If you want the numbers run on your own portfolio, our income tax calculator is updated for 2026/27 and the 2027/28 property income tax schedule.

The April 2026 timeline at a glance

Before drilling into each measure, here is every confirmed change with its effective date and source. The Autumn Budget 2025 added several items to a list that was already long — the IFS called it "the most substantial Budget for property taxation in a decade" in its 27 November 2025 analysis.

1. Property income tax: separate 22/42/47% rates from April 2027

The single biggest structural change in the Autumn Budget 2025 was the announcement that rental profit will be taxed under a separate property income tax schedule from 6 April 2027, with rates of 22% (basic), 42% (higher) and 47% (additional) — exactly 2 percentage points above the equivalent mainstream income tax rates. HM Treasury costed the measure at roughly £500 million per year in steady state, and the OBR's Autumn 2025 Economic and Fiscal Outlook (Box 3.2) flagged it as the most significant base-broadening property measure since the Section 24 reforms.

Mechanically, rental profit is still aggregated with your other income for purposes of identifying which band you sit in, but the tax computed on the property slice uses the new rates. To soften the blow for mortgaged landlords, the Section 24 mortgage interest tax credit goes up from 20% to 22% from the same date — meaning the credit still exactly matches the new basic rate, but higher-rate landlords are 2pp worse off on every pound of finance cost.

2. Frozen income tax thresholds extended to 2030/31

The income tax personal allowance (£12,570) and the higher-rate threshold (£50,270) had been frozen until April 2028 under the previous government. The Autumn Budget 2025 extended that freeze by a further three years to April 2031. The OBR estimates this is the single largest revenue-raiser in the Budget — worth more than £8 billion a year by 2030/31 — because it drags more landlords into higher rates by stealth every year wage and rent inflation continues.

For a landlord whose taxable income (including rent) sits at £48,000 in 2026/27, a 4% rent increase a year would push them over the £50,270 threshold by 2028/29 — at which point every additional pound is taxed at 42% under the new property schedule. The IFS calls this "fiscal drag on rocket boosters" in its 27 November 2025 Autumn Budget analysis.

3. Making Tax Digital for ITSA goes live 6 April 2026

After two delays, MTD ITSA finally starts on 6 April 2026. If your combined gross rental income and self-employment income exceeded £50,000 in 2024/25 (the qualifying year HMRC will use), you are mandated into MTD ITSA from the start of the 2026/27 tax year. You must keep digital records, submit quarterly updates to HMRC via MTD-compatible software, and file a Final Declaration by 31 January 2028.

1. Quarter 1 (6 Apr–5 Jul 2026): submission due 7 August 2026
2. Quarter 2 (6 Jul–5 Oct 2026): submission due 7 November 2026
3. Quarter 3 (6 Oct 2026–5 Jan 2027): submission due 7 February 2027
4. Quarter 4 (6 Jan–5 Apr 2027): submission due 7 May 2027
5. Final Declaration for 2026/27: due 31 January 2028

Late submission incurs penalty points under the new points-based regime: four points in a 12-month rolling window triggers a £200 fine. Our Making Tax Digital complete guide walks through software choice, the bridging-software exception, and exactly what HMRC expects in each quarterly update.

4. The High Value Council Tax Surcharge ("mansion tax")

The Autumn Budget 2025 confirmed the High Value Council Tax Surcharge, an annual charge on homes valued at £2 million or more, payable from April 2028. The Valuation Office Agency will use an April 2026 snapshot to assign properties to one of four new HVCTS bands, on top of the existing Council Tax bands A–H.

The charge falls on the property's beneficial owner — including landlords. There is no PRS exemption. We have a full breakdown including the appeal process and the interaction with the SDLT 17% corporate envelope tax in Mansion Tax 2028: High Value Council Tax Surcharge.

5. SDLT: 5% surcharge, 2% non-resident, 17% corporate envelope — all unchanged

Despite extensive lobbying from the NRLA and Propertymark, the Autumn Budget 2025 left every landlord-relevant SDLT rate untouched. The 5% additional dwelling surcharge (raised from 3% in the 30 October 2024 Budget) stays. The 2% non-resident surcharge stays. The 17% rate on residential purchases by non-natural persons (the "enveloped dwelling" rate) stays. The only confirmed SDLT change was the previously announced reversion of the first-time buyer nil-rate threshold from £425,000 to £300,000 on 1 April 2025.

6. CGT residential: 18% / 24% confirmed, AEA stays at £3,000

The 30 October 2024 Budget cut residential CGT rates from 18%/28% to 18%/24% to align them with rates on other assets (after the non-residential rate increases). The Autumn Budget 2025 made no further change — 18% basic / 24% higher remains the regime through 2027/28 and beyond, with the annual exempt amount frozen at £3,000. The 60-day reporting and payment deadline for residential disposals is unchanged.

7. Inheritance tax: BPR/APR £2.5m cap lands 6 April 2026

Announced in the Autumn Budget 2024 and confirmed in 2025, the £2.5m combined cap on Business Property Relief and Agricultural Property Relief takes effect from 6 April 2026. Above the cap, BPR and APR drop from 100% to 50% relief. £1m of unused cap can be transferred between spouses. AIM shares get only 50% BPR from the same date.

Crucially for landlords: residential buy-to-let portfolios have never qualified for BPR in the first place — HMRC views holding rental property as an investment activity, not a trade (the Pawson and Ramsay cases established this). So the BPR cap mostly affects landlords with diversified businesses (e.g. holiday let operators with substantial services, FHL portfolios that pre-dated the abolition, or trading businesses held alongside BTL).

8. FHL gone, non-dom gone, Section 24 still here

Furnished Holiday Lets

The FHL regime was abolished from 6 April 2025. From that date, holiday-let income is taxed as ordinary property income: no capital allowances on new expenditure (only replacement of domestic items relief), no Business Asset Disposal Relief on sale, no class 2/4 NIC for pension purposes, and finance costs restricted to the Section 24 basic-rate credit.

Non-domicile regime

The remittance basis ended on 6 April 2025. UK residents are now taxed on worldwide income and gains, with a 4-year Foreign Income and Gains (FIG) regime available to new arrivers. A 12% Temporary Repatriation Facility lets former non-doms bring pre-2025 offshore income onshore at 12% in 2025/26 and 2026/27 (rising to 15% in 2027/28). Landlords with overseas property income who previously used the remittance basis should model the FIG regime carefully — the 4-year window is binding once started.

Section 24 — unchanged in mechanics, slightly more generous from 2027

The Section 24 finance cost restriction is still in force. Mortgage interest is denied as a deduction and instead given as a basic-rate tax credit. The credit was 20% from 2020/21 through 2026/27, rises to 22% from 6 April 2027 to match the new basic property income tax rate, and continues to be wasted if your tax liability before the credit is lower than 22% of finance costs. There is no review of Section 24 — every speculative tweet to the contrary in the run-up to the Budget was wrong.

9. Pensions salary sacrifice cap — quiet hit on incorporated landlords

From April 2029, salary sacrifice into a pension will be NIC-free only on the first £2,000 per year. This is mostly framed as an anti-avoidance measure for high-earning employees, but it bites incorporated landlords who pay themselves a PAYE salary and route the rest into a Self-Invested Personal Pension via sacrifice. The post-2029 NIC saving on, say, a £20,000 sacrifice collapses from £2,760 (13.8% employer NIC) to £276.

10. Spring Statement 2026 (3 March 2026): nothing for property

True to the Chancellor's promise of one fiscal event per year, the Spring Statement 2026 was a forecast update only. The OBR revised 2026 GDP growth down to 1.1% (from 1.4% in November), cut its housing supply forecast to 220,000 net additions, and noted that buy-to-let mortgage approvals remained 18% below their 2021 peak. No tax changes — not even tinkering — and no consultation launches on property matters. Anyone expecting last-minute relief on the 2027 property income tax rate was disappointed.

The Treasury did, however, brief journalists ahead of the statement that the Autumn Budget 2026 will include consultations on three items potentially relevant to landlords: a council tax revaluation in England (bands have been frozen on 1991 values for 35 years), the application of Class 2/4 National Insurance to rental income, and tighter conditions for Section 162 incorporation relief. None of these are confirmed, but they are the items to watch through summer 2026.

11. The incorporation wave: 443,272 BTL companies and counting

Hamptons' January 2026 lettings index reported 66,587 new buy-to-let limited companies formed during 2025 — a record annual total. January 2026 alone saw 5,922 new incorporations, the highest single month ever. The total stock of active BTL companies now stands at 443,272, up from roughly 92,000 a decade earlier.

The drivers are well understood: corporation tax at 19%/25% versus the 22/42/47% personal property income tax from 2027, full deductibility of mortgage interest in a company (no Section 24), and Business Asset Disposal Relief unavailable on personal BTL anyway. The downsides — incorporation SDLT (unless s162 relief applies), CGT on transfer, double taxation on dividends — still bite, but the maths now tips toward incorporation for many higher-rate landlords with four or more mortgaged properties.

How Latch helps you stay on top of every change