Landlord income tax from April 2027: what are the new rates?
One rise is already law. A second was announced in Budget 2026. Both are shown.
From 6 April 2027, property income would be taxed at 24%, 44% or 49%. Weighing a sale? open for offer lets you test the market before you list. Half the rise is already law; Budget 2026 announced the other half.
Last reviewed 6 November 2026. Status: 22%, 42% and 47% are Law, in force from 6 April 2027. The further rise to 24%, 44% and 49% is Announced in Budget 2026, 28 October 2026; not yet law.
What are the new rates?
Property income has had its own rates of income tax since Finance Act 2026, which became law on 18 March 2026. For 2027-28 it set them 2 points above the main rates.
Budget 2026 then announced a further 2 points from the same date. The government says it will legislate in Finance Bill 2026-27.
| Band | 2026-27 (main rates) | 2027-28 in Finance Act 2026 | 2027-28 announced at Budget 2026 |
|---|---|---|---|
| Basic | 20% | 22% | 24% |
| Higher | 40% | 42% | 44% |
| Additional | 45% | 47% | 49% |
The Budget document says the rates would apply in England, Wales and Northern Ireland.
Scotland and Wales can differ. Section 8 of Finance Act 2026 lets the Scottish Parliament and the Senedd set their own property rates.
The Treasury brought it into force on 16 September 2026, with effect from the 2027-28 tax year. So for a Welsh landlord, the 2027-28 rates also depend on the rates the Senedd sets for that year.
How do the property rates work?
Section 6 of Finance Act 2026 created three new rates: the property basic, higher and additional rates. Property income is taxed at them where it would otherwise fall in the basic, higher or additional band.
Where rent straddles two bands, each slice is taxed at its own property rate. Either way, the announced rise is 4 points on every pound of property income.
So the bands do not move. A landlord's rent still fills the same bands as before; each band just carries a higher rate when the income is property income.
Tax on wages is not changing. From 2027-28, £1 of rent would be taxed 4 points more than £1 of salary in the same band.
What does 4 points mean in pounds?
Take £10,000 of taxable property income, all in one band. This is our arithmetic, and it ignores allowances, reliefs and how the bands fill.
| Band | 2026-27 | 2027-28 if announced rates pass | Difference |
|---|---|---|---|
| Basic | £2,000 | £2,400 | £400 |
| Higher | £4,000 | £4,400 | £400 |
| Additional | £4,500 | £4,900 | £400 |
A second example: £20,000 of property income taxed entirely at the higher rate. That is £8,000 at 40%, £8,400 at 42% and £8,800 at 44%. Again, our arithmetic.
Four points on £10,000 is £400 in every band. Of that, £200 is already law and £200 depends on the Finance Bill. The rise in pounds is the same whatever the band.
This page covers individual landlords in England, Wales and Northern Ireland. It does not cover Scotland's rates or landlords who own through a company.
Finance costs, such as mortgage interest, have their own rules. We have not covered how they interact with the new rates.
Tax depends on your circumstances. HMRC's guidance is linked below; an accountant or tax adviser can apply it to you.
Why did the government raise them?
The Budget says it is keeping tax on earnings unchanged while "seeking an additional contribution" from income from assets.
Savings income is treated the same way: Budget 2025 raised savings and property rates by 2 points from April 2027, and Budget 2026 adds 2 more to both.
It says 84% of income tax payers would be unaffected by these changes. It also expects around half of the revenue to come from the top 10% of households.
What happens next?
The 2 points in Finance Act 2026 are already law. The further 2 points need Finance Bill 2026-27 to pass before 6 April 2027.
If the further rise did not pass, the Finance Act 2026 rates of 22%, 42% and 47% would still apply from that date.
We will update this page when it does, or if the rates change on the way. Each Budget, and every 6 April, we re-check every rate here.
What about selling a let property?
Higher tax on rent changes the sum some landlords do each year: keep letting, or sell. Selling raises a different tax, Capital Gains Tax, reported on a deadline.
Our guide to selling a buy-to-let sets out those rates. A market estimate gives you the other half of the sum: what the home might sell for.
open for offer is the pre-market, the market that exists before a property is ever advertised.
Sources and corrections
Sources, checked 6 November 2026: Finance Act 2026, sections 6, 7, 8 and 2, and S.I. 2026/1023, legislation.gov.uk.
Also the Budget 2026 document, sections 3.9 and the tax annex, published 28 October 2026.
Contains public sector information licensed under the Open Government Licence v3.0.
Corrections: none so far. If we find an error, we will correct it here, with the date and the figure we changed.
Common questions
What is the property income tax rate from April 2027?
Finance Act 2026 sets 22%, 42% and 47% for 2027-28. Budget 2026 announced a further rise to 24%, 44% and 49% from 6 April 2027, which is not yet law.
Does the higher landlord tax apply in Scotland?
The Budget 2026 document says the announced rates apply in England, Wales and Northern Ireland. Scotland sets its own income tax rates.