Landlords across the UK are bracing themselves for one of the most important Budgets in years.
The official date for the Autumn Budget 2025 has been confirmed as 26th November and with Labour’s manifesto promising only one major fiscal event each year, it carries more weight than usual. After a relatively modest Spring Statement in March, many eyes now turn to revenue raising measures, with property owners in the spotlight.
The key proposals could affect UK property market trends and landlords due to possible changes to landlord tax, Stamp Duty Land Tax, National Insurance and more. Buy-to-let property owners should familiarise themselves with potential revisions to existing legislation and consider viable strategies to prepare.
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Rental income under new pressure
One of the most talked about proposals is the introduction of a National Insurance levy on rental income. Under current law, landlords pay income tax on rental profits, but are exempt from National Insurance Contributions. The idea being floated would bring rental income into NICs territory – a levy of perhaps 8% on landlords’ net rental profits is under discussion. Some reports suggest this could raise up to £2 billion in additional revenue for the Treasury.
If implemented, this change would squeeze net profitability. Smaller landlords, in particular, might find their margins reduced sharply, especially in lightly yielding markets. The impact could be passed on in increased rents as landlords seek to survive ongoing financial pressures, although such a move might be constrained by regulations, or tenant affordability limits.
One complexity revolves around whether such NICs would apply to incorporated landlords. If only individual landlords are targeted, company owned property may become relatively more attractive, potentially shifting investor strategies. Some analysts suggest applying a new class of NICs specific to property income, rather than placing landlords into existing Class 1 or Class 4 insurance frameworks.
Stamp duty shake‑up
Another cornerstone of speculation is the fate of Stamp Duty Land Tax. Currently, landlords and second home buyers pay a surcharge in England and Northern Ireland over and above the standard SDLT rates.
In Wales, anyone owning a property and buying a second property as a company or landlord is liable for LLT, regardless of the value of property. To encourage first time buyers; it’s only if you’re buying your first home that the 0% rate applies up to £225,000. LTT rates vary, depending on the property’s value.
A rate of 5% applies to properties with a purchase value of up to £180,000. Landlords would pay 8.5% on a property of £200,000; for properties valued at between £250,000 and £400,000, the rate goes up to 10%. Even higher rates of 12.5%, 15% and 17% apply in the more expensive property brackets.
In Scotland, Land and Buildings Transaction Tax must be paid if you buy property or land above a certain value. While most people know it as the tax they pay when buying a house, it also applies to non-residential purchases and leases.
One proposal is to abolish the tax for most transactions and instead introduce a national property levy on sales of homes over a threshold, for example, of £500,000. Under this model, tax might be calculated based on the duration of ownership, with a scaling rate structure.
The intention is to remove a barrier to mobility, as stamp duty often reduces the incentive to move or downsize. However, replacing it with a sale based levy introduces its own complexities, such as longer transaction times, tax planning for the timing of sales, and valuation disputes. Some market analysts fear it could deepen regional disparities, especially in high‑value markets where such levies hit hardest.
For landlords, SDLT adds a substantial upfront cost to property acquisition. While reform might ease entry expenses, the burden could shift to exiting instead. Landlords will need to consider scenarios such as buying, holding and selling under different frameworks.
Capital Gains Tax and exit strategies
There are likely to be changes to Capital Gains Tax for property, which was left untouched in the 2024 Autumn Budget. One possibility is aligning CGT rates more closely with income tax rates, including raising it to match the top income tax bands. Another is reducing the annual CGT exemption allowance, which has already been cut in recent years.
The most controversial idea potentially on the table is limiting or removing Private Residence Relief on high‑value homes above a certain threshold of, for example, £1.5 million. This would mean the owners of expensive homes would lose their tax-free gain status, turning a haven into a tax risk.
For landlords, CGT changes could alter the timing of portfolio rotation, specialisation and exit timing. Landlords planning to sell within a few years may accelerate their plans before the changes bite.
Inheritance Tax and estate planning
The Autumn Budget could introduce Inheritance Tax (IHT) reforms that affect property owners. Potential changes include tighter restrictions on reliefs, lower thresholds for exemptions, or adjustments to the Principal Private Residence allowance. More estates could cross IHT thresholds as a result, triggering heavier taxation on passing rental portfolios to heirs.
For landlords, this heightens the need for estate and trust planning. Some may choose to interpose corporate entities, use lifetime gifts, or leverage reliefs to mitigate the future burden.
Council Tax reforms
Council Tax has long been criticised for using outdated 1991 property valuations. Revaluation, added bands, or even replacement of Council Tax with a local proportional property tax are among the ideas in play.
For landlords, especially those owning multiple properties, this could translate into higher costs. Multi-property owners, HMOs and landlords in high‑value locations could bear the brunt.
In national proposals, councils might be permitted, or required, to set higher bands for very high value homes, effectively pushing the tax burden onto the wealthiest property owners.
Landlords respond to potential changes
While policy debates continue, several property market reports show a decline in instructions to sell, meaning some landlords are holding back. In London and the South East, high-end property listings and buyer demand have cooled significantly. On the other hand, some landlords intend to sell, rather than face unknown tax burdens. Others are scaling down portfolios, focusing on core properties rather than expansion.
Rising mortgage rates, tighter regulations and escalating maintenance costs are steadily eroding profitability. Tax changes for landlords, particularly those operating in lower yield or more marginal areas, could hit especially hard, making some rental models unsustainable.
This climate of uncertainty is leading many to take defensive action, such as restructuring ownership, or adopting tax-efficient holding structures such as corporate ownership.
Strategies to prepare and safeguard
With uncertainty looming, it could be useful to review your finances, in consultation with tax professionals. Ask if your business can absorb model scenarios such as NI on rental income, CGT hikes, or council tax revaluation. Determine what yield thresholds can remain viable.
Expert insight may reveal opportunities to restructure holdings, use reliefs, or time transactions favourably, particularly if you own multiple properties. On acquisitions, ensure potential costs are built into your forecasts.
Join landlord associations and industry bodies, because when reforms are proposed, representation matters. The National Residential Landlords’ Association, for example, is vocal about preserving investment in housing supply.
As Chancellor Rachel Reeves prepares to deliver her Budget, the residential property market holds its breath. On 26th November, landlords will finally know how significant the changes will be and whether they’re equipped to navigate the turning tide.