The Autumn Budget 2025 introduces new tax measures and regulatory changes that will significantly affect landlords, homeowners and buyers. With a new mansion tax, higher property income taxes and reforms to the buying process, the property landscape is set for major shifts over the coming years.
The Budget confirms a 2% increase to the basic, higher and additional rates of property income tax from April 2027.
The new rates will be:
This applies to rental income from the private rented sector and short-term lets.
Regional mayors will also gain powers to introduce an overnight visitor levy, similar to the schemes planned in Wales (£1.30 per night) and Scotland (5% of accommodation cost). A consultation will determine how the levy should be applied.
These measures come on top of a decade of policy changes that have already reduced returns for private landlords, including reduced mortgage interest relief, the Stamp Duty surcharge on second homes, reduced Capital Gains Tax allowances and new rules under the Renters’ Rights Act.
Over time, the continued erosion of landlord returns is expected to reduce the supply of rental homes. If demand continues to rise, rents are likely to increase long-term.
A new High Value Council Tax Surcharge will be introduced for properties valued above £2 million from April 2028. The annual charge will range from £2,500 to £7,500 depending on the value of the property.
Zoopla reports that around 0.5% of UK homes will be affected, with 85% of these in London and the South East. This surcharge targets property wealth and increases ongoing costs for high-value homeowners, likely reducing demand in the luxury market.
Despite the new charges, average UK house prices are forecast to rise from £260,000 in 2024 to just under £305,000 in 2030. Price growth is expected to average 2.5% annually from 2026 onwards, broadly matching earnings growth. However, long-standing issues in the home buying and selling process continue to cause delays and fall-throughs.
Propertymark highlights three key reform priorities:
The UK Government’s consultation on home buying and selling reform is ongoing.
The Autumn Budget 2025 signals a clear shift towards taxing property wealth and rental income more heavily.
Key impacts include:
These reforms will influence investment decisions, property affordability and the balance between rental and ownership markets in the years ahead.
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