Quick answer: From the 2027 to 2028 tax year, property income rates increase to 24%, 44% and 49% for individuals in England, Wales and Northern Ireland. Making Tax Digital for Income Tax extends to landlords with qualifying income above £30,000 from 6 April 2027.
The rules are fact-specific and can differ for Scottish and Welsh taxpayers. This guide is based on the official Budget 2026 property income policy paper.
What changes for rental income?
The new property income tax rates apply to individuals and partnerships who receive property income. They are 24% for the property basic rate, 44% for the property higher rate and 49% for the property additional rate. The starting point is your taxable rental profit, not your gross rent, but the effect of the new rates depends on your expenses, finance costs, other income and tax band.
A landlord holding property through a company does not pay these individual property income rates; a company has a different Corporation Tax and extraction position. That does not make incorporation an automatic answer. Transferring property can trigger Capital Gains Tax and Stamp Duty Land Tax, affect borrowing and increase administration. Get the figures for your own portfolio before deciding.
Capital Gains Tax and Stamp Duty Land Tax
Budget 2026 did not announce a general rise in Capital Gains Tax rates for rental-property disposals or a general new Stamp Duty Land Tax rise aimed at landlords. A sale, gift, transfer to a company or change in ownership still needs careful calculations because reliefs, ownership history, finance and connected-party rules can change the outcome.
Making Tax Digital for Income Tax
From 6 April 2027, Making Tax Digital for Income Tax extends to sole traders and landlords with qualifying income above £30,000. Those in scope need to keep digital records and use compatible software to send quarterly updates of income and expenses, as well as completing the end-of-year process. The threshold is scheduled to reduce to £20,000 from April 2028.
Qualifying income is based on gross income before expenses, not the profit left after costs. Good bookkeeping now will make the transition much easier. See our bookkeeping service and VAT advice for related support.
What landlords should do now
- Calculate the expected rental profit at the new property income tax rates.
- Check that all allowable costs are recorded and evidenced.
- Review whether the current ownership structure still works, without assuming a company will be better.
- Prepare digital records and compatible software before the April 2027 MTD deadline.
- Take advice before selling, gifting or transferring a property.
Frequently asked questions
How much tax will landlords pay from April 2027?
For individuals in England, Wales and Northern Ireland, the property basic, higher and additional rates are set at 24%, 44% and 49%. The actual tax depends on taxable profit and the taxpayer's full circumstances.
Does this affect landlords with a limited company?
The new individual property income rates do not apply to rental profit received by a company. A company structure has different tax and legal consequences, so it should be assessed on its own merits.
Should I sell my rental property?
Not on the basis of a headline alone. A sale decision should consider your actual return, mortgage, potential tax on a disposal, future plans and the costs of alternative structures.
Last updated: 1 November 2026. This article is for general information only and is not property tax advice.