Budget 2026: Landlord Income Tax Rates Just Rose Again, to 24%, 44% and 49%
RealYield Team
Property Analyst
Chancellor John Healey's first Budget did what our Monday preview flagged as the one thing landlords should actually watch for, and then went slightly further than the number everyone already had. Property income tax rates, which were due to rise to 22%, 42% and 47% from April 2027 under law already on the books, are going up again. The new rates announced on 28 October are 24%, 44% and 49%. That is not a correction or a rounding. It is a second rise stacked on top of the first, both landing on the same date.
Here is what the Budget documents actually say, separated clearly from what did not change.
The Rate Rise, Confirmed
From 6 April 2027, property income will be taxed at 24% basic rate, 44% higher rate and 49% additional rate. That is according to the Budget 2026 Overview of Tax Legislation and Rates, the government's own technical document setting out what will go into the next Finance Bill.
To see how much has moved, line up the three versions of this rate:
| Tax band | Rate before any changes | Rate from April 2027 (2025 Budget) | Rate from April 2027 (2026 Budget, confirmed 28 Oct) |
|---|---|---|---|
| Basic | 20% | 22% | 24% |
| Higher | 40% | 42% | 44% |
| Additional | 45% | 47% | 49% |
Both rises take effect on the same date, 6 April 2027, so in practice a landlord moves straight from today's rate to the new one. The 22/42/47 figures never actually apply in isolation. The government's reasoning, as before, is narrowing the gap between how rental income and earned income are taxed, since landlords pay no National Insurance on rent. The Office for Budget Responsibility puts the extra revenue from this second rise at around £400 million a year on average from 2028-29, on top of what the 2025 change already raises, and rates its own costing as carrying "high" uncertainty.
Frequently Asked Questions
What did the Autumn Budget 2026 change for landlords' income tax?
Property income tax rates are set to rise by a further two percentage points, to 24% basic rate, 44% higher rate and 49% additional rate, from 6 April 2027. This is on top of the rise to 22%, 42% and 47% already legislated at the 2025 Budget, so the total increase since 2025 is four percentage points across every band.
Is the new 24%/44%/49% rate already law?
No. It was announced in the Budget 2026 policy documents and will be legislated in Finance Bill 2026-27. The earlier rise to 22%, 42% and 47% is already law, confirmed in the Finance Act 2026, which received Royal Assent in March 2026. The new increase needs its own Act of Parliament before it takes effect on 6 April 2027.
Did Capital Gains Tax change at this Budget?
No. CGT on residential property stays at 18% within the basic rate band and 24% above it, with a £3,000 annual exempt amount. Nothing in the Budget 2026 documents changes these figures for individuals.
Did Stamp Duty Land Tax change for buy-to-let purchases?
No. The additional property surcharge, 5 percentage points on top of the standard residential rates, is unchanged. The one SDLT change affecting landlords is narrower: rent paid under an assured tenancy no longer counts towards SDLT, closing a technical issue created by the Renters' Rights Act.
Was the mansion tax threshold cut to £1.5 million?
No. The High Value Council Tax Surcharge keeps the £2 million threshold set at the 2025 Budget. The lower £1.5 million threshold that had been floated in pre-Budget commentary was not adopted. The surcharge still starts in April 2028.
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April 2027: Every Landlord's Tax Rate Is Going Up. Here Is What You Need to Know.
From 6 April 2027, rental income is taxed at new separate rates: 22% basic, 42% higher, 47% additional. Around 2.4 million individual landlords in England, Wales and Northern Ireland are affected. Here is what the change means in practice and what to do before the rates take effect.