Budget 2026: What the Tax Rise on Rental Income Means for Bromley Landlords
Budget day always brings a flurry of calls to the shop. This year was no different. By the end of yesterday, the same question kept coming up: “David, what does this mean for my rental?”
The Chancellor, John Healey, delivered his first Budget on Wednesday 28 October. Most of it was steadier than many feared. But there is one headline that matters to landlords, so let’s take it calmly, step by step.
The big one: tax on rental income rises again
The Chancellor announced that tax on property income will rise by a further two percentage points from 6 April 2027. This sits on top of the two-point rise announced in last year’s Budget, which also starts in April 2027. Added together, that is four points. For England, Wales and Northern Ireland, the rates on property income are reported to become 24% (basic), 44% (higher) and 49% (additional).
Please note: these rates do not apply to companies. They apply to individuals who receive rental income personally. If you own your rental property through a limited company, the company pays corporation tax on its profits instead, so these income tax rates are not the ones that apply to it.
The Office for Budget Responsibility estimates the extra rise will raise roughly £0.4 billion a year from property income, and notes a high level of uncertainty around that figure. It has also warned that, alongside other recent measures, it makes a steady rise in rents “more likely than not” over the long run.
What this means for landlords: from the 2027/28 tax year, you will keep less of each pound of rent. It is worth working out now what your net return looks like for each property, rather than finding out when the bill lands.
Capital gains tax: rates unchanged
Live Budget coverage reports that the Chancellor left capital gains tax rates unchanged, while changing some reliefs aimed at business owners. We did not find any change specific to residential property sales.
What this means for landlords: no new hit if you are thinking of selling, but we would still suggest taking advice on timing and allowances.
Making Tax Digital: some breathing space
Making Tax Digital for Income Tax is being phased in by income. Based on the published timetable, the threshold was £50,000 from April 2026, falls to £30,000 from April 2027, and then to £20,000 from April 2028. The Budget reportedly defers the rollout for some other groups, and gives those joining in April 2027 (over £30,000) no late-submission penalty points on quarterly updates in 2027/28.
What this means for landlords: if your gross rent and other self-employed income is near these thresholds, check with your accountant which date applies to you, and whether your software is ready. Late payment penalties still apply.
Stamp duty, council tax and energy efficiency (EPC)
We found nothing in the coverage we reviewed announcing changes to the 5% higher-rate stamp duty surcharge, council tax for landlords, or EPC requirements. We cannot say for certain that nothing was announced, as we have not yet read the full Budget documents, so please treat these as “no change found” rather than “confirmed unchanged”.
Renters’ Rights Act: already in force
This is not a Budget measure, but it shapes every landlord’s decisions. Section 21 “no-fault” evictions ended in England on 1 May 2026, and possession now runs through Section 8 grounds. Careful tenant vetting, tidy paperwork and clear communication matter more than ever.
What to do next
- Run your numbers. Work out each property’s net return at the April 2027 rates.
- Speak to your accountant about Making Tax Digital and whether your current set-up still makes sense.
- Check your compliance. Gas, electrical, EPC, deposit protection and your Renters’ Rights paperwork.
- Review your rent and costs sensibly and fairly, within the rules.
- Talk to us. We are happy to look at your portfolio with you.
Pop in for a chat
We have looked after landlords across Bromley and Kent since 2004, and we have seen plenty of Budgets come and go. Whether you want Let Only, Rent Collection or Full Management, we have no minimum term contracts. If you are not happy, you can walk away.
Pop into the shop at 187c Southborough Lane, Bromley (Monday to Friday, 9am to 5pm, evenings and weekends by arrangement) or visit djames.co.uk for a free, no-obligation chat about your lettings.
This article is general information only. It is not legal, tax or financial advice. Please speak to a qualified accountant about your own circumstances.
David, Sue and Team — doing property, properly.
