3 publishers · first seen Thu, 29 Oct 2026 05:22 UTC · updated Fri, 30 Oct 2026 05:55 UTC
Chancellor John Healey has announced a further two percentage point increase in income tax on rental income from April 2027, raising the basic rate to 24%, the higher rate to 44%, and the additional rate to 49%. The move, part of Budget 2025, follows a previous two-point rise announced last year by his predecessor Rachel Reeves, bringing the total surcharge on property income to four percentage points. The Office for Budget Responsibility (OBR) has warned the policy could lead to a steady rise in rents and reduce rental supply.
Industry groups including the National Residential Landlords Association (NRLA) and Propertymark have criticised the decision, saying it will make letting less attractive and could drive landlords out of the market. Experts warn the tax rise, combined with existing regulatory changes like the Renters’ Rights Act, may reduce the number of homes available to rent and increase pressure on tenants, while most of the revenue is expected to come from the top 10% of households.
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