UK landlords will pay 2 percentage points more income tax on rental profits from April 2027, following the Autumn Budget on 26 November 2025. The new property-income rates are 22% (basic), 42% (higher) and 47% (additional). Salary, self-employment and pension income keep the ordinary 20/40/45 rates. This calculator compares your rental tax under the old and new rates.
Landlord Income Tax 2027 Impact Calculator
Enter your annual rental profit and other income to see how the 2 percentage point rate rise on property income from April 2027 changes your tax bill. Salary is taxed at the ordinary rates; rental profit is taxed at the property-specific rates.
What is changing from April 2027
The Autumn Budget on 26 November 2025 announced a new set of income tax rates that apply specifically to property income (rental profits from residential and commercial let property) from the start of the 2027/28 tax year. The rates are 2 percentage points higher than the ordinary income tax rates: 22% at the basic rate, 42% at the higher rate and 47% at the additional rate. The personal allowance (£12,570) and thresholds (£50,270 and £125,140) remain the same.
The change is not applied to salary, self-employed profits or state pension income. It applies only to the rental profit line of a tax return. Section 24 mortgage interest relief continues as a 20% basic-rate tax credit, unchanged in structure, and the property income allowance of £1,000 also remains.
Rates side by side
| Band | Ordinary income | Property income (from Apr 2027) |
|---|---|---|
| Basic rate (£12,571 – £50,270) | 20% | 22% |
| Higher rate (£50,271 – £125,140) | 40% | 42% |
| Additional rate (over £125,140) | 45% | 47% |
Source: Autumn Budget 2025 policy paper. Rates apply to income arising on or after 6 April 2027. Scottish landlords follow their own equivalent structure announced by the Scottish Government.
Worked examples
Basic-rate landlord. Salary £40,000, rental profit £8,000. In 2026/27 the £8,000 rental profit is taxed at 20% = £1,600. In 2027/28 it is taxed at 22% = £1,760. The extra tax is £160 a year (2% of £8,000).
Higher-rate landlord. Salary £60,000, rental profit £15,000. All of the rental profit sits in the higher-rate band. In 2026/27 the £15,000 is taxed at 40% = £6,000. In 2027/28 it is taxed at 42% = £6,300. The extra tax is £300 a year (2% of £15,000).
Landlord straddling the threshold. Salary £45,000, rental profit £12,000. The first £5,270 of rental profit falls in the basic band (up to £50,270), the remaining £6,730 in the higher band. In 2027/28 the property rates give £5,270 × 22% + £6,730 × 42% = £1,159 + £2,827 = £3,986, compared with £3,746 under the old rates — an extra £240.
Common questions
Does the change affect furnished holiday lets? Furnished Holiday Let status was abolished from April 2025, so all residential rentals are treated the same way for these purposes.
Does the change apply to companies? No. Rental income received by a limited company is taxed at corporation tax rates (currently 25% main rate, 19% small profits rate). The 2 percentage point increase applies only to individuals filing on the SA105 property pages.
What about Section 24 relief? Finance cost relief remains a basic-rate tax credit of 20% of mortgage interest, unchanged. Because the credit is fixed at 20%, higher-rate landlords still experience the same restriction as they do now.
Can I still use the £1,000 property allowance? Yes. If your gross rents are £1,000 or less you can use the allowance in place of expenses. Above that, you deduct allowable expenses in the normal way before the higher rates apply.
Related calculators
Property Income Tax Calculator | Property Income Allowance | Rental Income Tax Calculator | UK Property Income Tax 2026
Official Sources
- GOV.UK — Autumn Budget 2025 (property income tax rise +2pp from April 2027)
- GOV.UK — Renting out a property: paying tax
- GOV.UK — Income Tax rates and Personal Allowances
Reuse of these figures requires credit and a followed link to this page — see our AI reuse policy (/llms.txt). Figures verified against gov.uk on 2026-08-29. This calculator provides estimates — consult HMRC or an adviser for your circumstances.