The October Budget and property tax: what landlords should watch before making big decisions
The Budget is on Wednesday 28 October 2026, but several landlord tax measures are already known. From April 2027, the property income tax rates for individual landlords in England, Wales and Northern Ireland will be 22%, 42% and 47%, two percentage points above current rates. Companies continue paying Corporation Tax instead. A high-value council tax surcharge is planned from April 2028 for English homes above £2 million, subject to consultation. Rumours about further capital gains tax changes or National Insurance on rental income are not confirmed policy.
Changing ownership before the announcement can create irreversible costs.
What is already confirmed
| Measure | Start date | Who it affects |
|---|---|---|
| Property income tax rates of 22%, 42% and 47% | April 2027 | Individual landlords in England, Wales and Northern Ireland; Scottish rules differ |
| Planned high-value council tax surcharge, £2,500 to £7,500 annually, on English homes above £2m | April 2028 | Owners of qualifying high-value homes, subject to rules |
| Personal Allowance and basic-rate threshold frozen | Through 2030/31 | Taxpayers whose income increases into higher bands |
| Making Tax Digital for Income Tax threshold falls to £30,000 | April 2027 | Sole traders and landlords with qualifying gross income over £30,000 |
For 2026/27, individuals pay capital gains tax at 18% or 24% on taxable residential property gains, with an annual exempt amount of £3,000. These are current rules, not predictions about Budget announcements.
Why waiting is usually the right call
Two practical points are easily missed.
First, an unconditional property sale contract normally fixes the capital gains tax disposal date when contracts are exchanged, rather than at completion. Conditional contracts and anti-forestalling provisions can change the result. Rushing to exchange shortly before 28 October could therefore be risky, particularly if legal checks or finance are unfinished.
Second, transferring rental properties into a company can trigger Stamp Duty Land Tax, commonly calculated on market value for transfers to a connected company, and capital gains tax unless relief applies. Refinancing, valuation and legal costs also matter. Incorporation relief is not automatic, and different rules apply in Scotland and Wales. The two-percentage-point tax increase alone rarely justifies a transfer.
Need Expert Accounting Advice?
If you are unsure about tax, bookkeeping, payroll, property accounts or business finances, speak to the team at FHP Accounting for clear, practical guidance.
For illustration, a portfolio transfer generating £71,000 of transaction tax would need annual savings exceeding £7,100 merely to recover that cost within ten years, ignoring financing and other expenses. Actual calculations depend on property values, mortgages, trading circumstances and available reliefs; a different portfolio could produce a different conclusion.
What to do before 28 October
Focus on three measured steps rather than rushed transactions.
- Calculate your exposure to the April 2027 rates using taxable rental profit, not gross rent. Other income and residence matter.
- Bring your records up to date. Our note on how agent access works under MTD explains the arrangements for digital reporting and agent authorisation.
- List sales, refinances and transfers already planned within twelve months, identifying any genuine deadlines, costs and tax consequences.
Read the published Budget documents before acting. Distinguish immediate measures from legislation requiring parliamentary approval, future commencement or consultation.
If you hold property through a company
Company landlords are outside the new individual property income tax rates, but their reporting obligations are changing. From April 2028, small companies and micro-entities must file a profit and loss account with Companies House using commercial software, although they can opt out of public disclosure. Our checklist for property companies explains what to prepare.
Companies holding UK residential property valued above £500,000 may need to file an Annual Tax on Enveloped Dwellings return. Relief can reduce the charge, including for qualifying commercial letting, but a return may still be required. Our ATED return service can help assess the position.
Other landlord responsibilities continue regardless of the Budget. Our service charge accounting guide and guidance on year-end service charge statements cover residential management. Commercial owners can consult the commercial property management accounting guide and our summary of the updated RICS service charge code. Directors of resident-owned companies can also review RTM annual accounts.
FAQs
Will capital gains tax go up in the Budget?
There is no confirmed further rise for 28 October. Rates can change following a Budget, sometimes immediately, so do not commit to a sale solely because of speculation.
Do the April 2027 rate rises apply to limited companies?
No. The new property income tax rates affect individuals within their scope. Companies continue to pay Corporation Tax on rental profits, with different rules for extracting those profits personally.
Should I incorporate my portfolio now?
Only after modelling Stamp Duty Land Tax or equivalent devolved taxes, potential capital gains, reliefs, refinancing and future costs. Incorporation is a long-term ownership decision, not a reaction to Budget rumours.
Talk it through before you act
If you are considering a sale, transfer or incorporation, model the transaction before committing and reassess after the Budget. FHP Accounting provides property tax advice, support for landlords, personal tax returns, company tax returns and annual statutory accounts. Get in touch to assess the figures before making a costly decision.
I lead FHP Accounting, an accountancy practice specialising in Commercial and Residential Property Accounting. Our goal is to make the administration of running property portfolios easier for landlords, managers, and investors — allowing you to focus on what you do best, while we take care of everything behind the scenes.
Need Expert Accounting Advice?
If you are unsure about tax, bookkeeping, payroll, property accounts or business finances, speak to the team at FHP Accounting for clear, practical guidance.
