Chancellor John Healey delivers his first Budget on Wednesday 28 October 2026. Between now and then there will be plenty of headlines about landlords. Some of the changes being discussed are already law and will happen whatever is announced. Others are only rumour. Here’s how to tell them apart.
In short
- When: Wednesday 28 October 2026. The Office for Budget Responsibility publishes its forecast the same day.
- Already decided: income tax on rental profits rises by 2 percentage points from 6 April 2027.
- Already decided: Making Tax Digital reaches landlords with income over £30,000 from April 2027.
- Only rumour: changes to capital gains tax. Nothing has been announced.
- Our advice: don’t sell or restructure on a rumour. Wait for the Budget documents.
What’s already decided
These changes were announced at the November 2025 Budget and have start dates. They will happen whatever the Chancellor says on 28 October.
| Change | From | Who it affects |
|---|---|---|
| New tax rates on rental profits: 22% basic, 42% higher, 47% additional (each up 2 points) | 6 April 2027 | Landlords who own property in their own name, in England, Wales and Northern Ireland. Not limited companies. |
| Mortgage interest relief given at 22% instead of 20% | 6 April 2027 | The same landlords, through the existing tax reduction for finance costs. |
| Making Tax Digital for Income Tax threshold falls from £50,000 to £30,000 | 6 April 2027 | Landlords whose rental and self-employed income, before expenses, was over £30,000 in 2025/26. |
| Making Tax Digital threshold falls again, to £20,000 | 6 April 2028 | Landlords with income over £20,000, roughly two homes let at the average Worcester rent. |
What the tax rise costs in practice: every £10,000 of taxable rental profit costs £200 more a year from April 2027. If you have a mortgage, the higher 22% relief on interest softens that a little.
What’s only rumour
- Capital gains tax. Reports suggest the Treasury has looked at raising it. Nothing has been announced. Gains on residential property are currently taxed at 18% or 24%.
- A new annual property tax. Replacing stamp duty and council tax with a single annual property tax was reported in August as not going ahead at this Budget.
Why “selling before the Budget” rarely works: for capital gains tax, a sale counts on the day contracts are exchanged, not on completion. Past Budgets have changed rates from Budget day itself. With conveyancing taking months, almost no sale agreed now could exchange before 28 October.
What we’d do now
- Don’t sell or move properties into a company because of a rumour. Moving property into a limited company triggers stamp duty and capital gains tax that are certain, to avoid a change that may never happen.
- Ask your accountant to model April 2027 on your own figures, including your mortgage interest.
- Check whether Making Tax Digital will apply to you. If your rental income before expenses was over £30,000 in 2025/26, you’ll need compatible software by April 2027.
- Keep clean records. If we manage your property, your monthly statements give your accountant the income and costs they need.
Also coming up before Christmas
| Date | What happens |
|---|---|
| Thursday 5 November | Bank of England interest rate decision. Bank Rate was held at 3.75% on 17 September, but three of the nine committee members voted for a rise. If your fixed rate ends soon, speak to a broker now. |
| Saturday 7 November | Second Making Tax Digital quarterly update due, for landlords already in the scheme (income over £50,000). There are no penalty points for late updates this tax year, but HMRC needs every update before you can file your return. Aim for Friday 6 November. |
| Tuesday 15 December | The national landlord database opens, starting with the West Midlands. Let properties in Worcestershire must be registered by 14 March 2027. Read our guide. |
We’ll look at what the Budget actually means for landlords once the documents are published on 28 October.
Planning your next move?
We don’t give tax advice, but we can tell you what your property would let for, what it costs to run and what’s coming in compliance, so you and your accountant can plan with real numbers.
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Written by Lukasz Rusiecki, Managing Director of Gallery Properties. We’ve managed landlords’ homes across Evesham, Worcester and Worcestershire since 2010.
Last checked: 19 October 2026. This article is general information, not tax or financial advice. Speak to your accountant before acting. Sources: HMRC technical note on property income tax rates; HMRC on Making Tax Digital.
