Budget 2025: key measures for property landlords

Budget 2025 was presented to Parliament on 26 November 2025. Several tax measures were announced that will affect property landlords.

Income tax on dividend income

The income tax rates for dividend income will increase from 6 April 2026:

• The basic rate will increase from 8.75% to 10.75%.
• The higher rate will increase from 33.75% to 35.75%.
• The additional rate will remain unchanged at 39.35%.

The dividend allowance will remain at £500 in 2026/27.

Income tax on property income

The government will create separate Income Tax rates for property income from 6 April 2027.

• The property basic rate will be 22%.
• The property higher rate will be 42%.
• The property additional rate will be 47%.
• Finance cost relief will be provided at the separate property basic rate (22%).

The new rates will apply to taxpayers in England and Northern Ireland. The Scottish and Welsh governments will be given powers to set rates of property income tax applicable to Scottish and Welsh taxpayers.

Income tax on savings income

Also, from 6 April 2027, the rates of income tax on savings income will increase as follows:

• The basic rate will increase from 20% to 22%.
• The higher rate will increase from 40% to 42%.
• The additional rate will increase from 45% to 47%

‘Mansion Tax’

From 1 April 2028 a new High Value Council Tax Surcharge (HVCTS) will apply to owners of residential properties in England worth £2 million or more. The charge will be in addition to the existing Council Tax, and will be collected by local authorities. Properties valued above the £2 million threshold will be placed into bands based on their value. The minimum charge will be £2,500.

Tourism tax

The government has announced that it will give mayors and potentially other local leaders, subject to consultation, the option to introduce a visitor levy on overnight visitor accommodation in their area. This will fund further investment in growth locally, including the visitor economy. The government is consulting on the design of the levy. This measure will apply to England only; similar levies have already been introduced in Scotland and Wales.