Landlords face two tax rises in two Budgets. From 6 April 2027, rental profits get their own income tax rates, four percentage points higher than the rates on earnings and pensions.
The new rates
- Property basic rate: 24% (was 20%)
- Property higher rate: 44% (was 40%)
- Property additional rate: 49% (was 45%)
Mortgage interest relief under Section 24 rises to 24%, in line with the new basic rate.
The personal allowance change
From April 2027 your personal allowance is set against your salary, pension or trading income first. For landlords with other income, more of the rent is taxed at the new, higher property rates.
What it means in practice
For a higher-rate landlord, every £10,000 of taxable rental profit costs an extra £400 a year in tax, on top of Section 24. Combined with higher mortgage costs and frozen tax bands, many portfolios are worth reviewing before April 2027.
See your own figures with the Section 24 tax calculator, or speak to a specialist about your options before the change.
Frequently asked questions
What are the new property income tax rates?
From 6 April 2027 in England, Wales and Northern Ireland: 24% basic, 44% higher and 49% additional. Budget 2025 announced 22%, 42% and 47%, and Budget 2026 added a further two points.
Does the new rate apply in Scotland?
The new rates apply in England, Wales and Northern Ireland. Scotland sets its own income tax rates, and the position for Scottish landlords depends on devolved decisions.
Do the new rates apply to companies?
No. Companies pay corporation tax on their profits. But dividend tax rates for company owners rose in April 2026.
Request a call back
Tell us a little about your situation and we'll call you, usually within one working day, to understand what you need. If it would help, we'll then put you in touch with a landlord tax specialist. We'll always tell you who they are before passing on your details. We don't give advice ourselves, and there's no obligation.