The 2025 Budget introduced several tax updates that will gradually shape the property landscape over the next few years. While none of the changes take immediate effect, landlords, buyers and homeowners will benefit from understanding how these upcoming adjustments may influence their plans. For now, the market remains steady and predictable.
Belvoir has summarised the key changes and what they mean for you.
A new surcharge for £2m+ homes from 2028
A High Value Council Tax Surcharge will apply to properties in England valued at £2 million or more, based on 2026 VOA assessments. The annual charge will range from £2,500 to £7,500 and is expected to affect around 100,000 properties, mainly in London and the South East. Because the surcharge does not start until April 2028, it has no impact on current property decisions.
Stamp duty and property taxes remain unchanged
The 2025 Budget confirmed that Stamp Duty Land Tax rates and thresholds will stay the same, with no changes announced. In addition, there are no new taxes for homes valued over £500,000. The only new measure is the 2028 surcharge for properties valued at £2m or more.
This means that, for most buyers and sellers, moving costs and ownership expenses will remain predictable and stable as we move into 2026.
Rental income tax increases from April 2027
Landlords in England, Wales and Northern Ireland will see rental income tax rates rise by two percentage points from April 2027. The basic rate will increase to 22 percent, the higher rate to 42 percent and the additional rate to 47 percent.
Scotland is unaffected, as it operates its own income tax structure.
Support for commercial and mixed-use landlords
From April 2026, reduced business rate multipliers will become permanent for retail, hospitality and leisure properties in England with a rateable value below £500,000. This replaces the temporary RHL relief and offers long-term savings for many commercial landlords.
Why property remains a strong investment
Even with upcoming tax adjustments, the core strengths of the property market remain in place. Rental demand continues to outstrip supply in many regions. Yields remain competitive, especially where rental homes are scarce.
Property maintains long-term capital growth potential and often performs more steadily than financial markets during uncertain periods. For investors who plan, opportunities remain strong and achievable.
The regional impact is largely concentrated in high-value areas
The new surcharge will mainly affect London and parts of the South East. In most other regions, very few homes exceed the £2 million threshold, meaning the impact will be minimal.
With stamp duty rules remaining exactly as they are, buyers and sellers across the UK can expect continuity well into 2026.
Important reforms to watch
While the Budget changes are mostly long-term, other upcoming legislation will have a more immediate influence on landlords and tenants.
Renters’ Rights Act
This legislation will reshape key responsibilities for both landlords and tenants. Belvoir offers guidance to help landlords prepare for the upcoming reforms. Read our full guide to the Renters’ Rights Act.
Making Tax Digital
From April 2026, landlords and self-employed property owners will need to move to digital tax reporting.
Preparing for what’s next
The 2025 Budget introduces changes that will unfold gradually over the next few years. Key points include the new council tax surcharge for homes valued above £2 million from April 2028, increases to rental income tax rates from April 2027 and long-term business rate support for certain commercial properties from 2026. Stamp duty remains completely unchanged.
Despite these adjustments, the property market continues to offer stability and long-term potential. With guidance from Belvoir estate agents, landlords and homeowners can plan and make informed decisions in a market that remains full of opportunity.
