With the Autumn Budget 2026 taking place on Wednesday 28 October, we will be watching closely for announcements that could affect rental income, property taxes and the wider buy-to-let market. Budgets in recent years have been unpleasant its fair to say, so we are hoping this one is much more low key.
Chancellor John Healey faces the challenge of balancing the public finances while encouraging economic growth. For property investors, the key questions are whether taxes will rise further, whether stamp duty could change and what the Budget might mean for mortgage rates and future investment returns.
There has been plenty of speculation, but there are also some encouraging indications ahead of the announcement.
At North Fox Property, we’ve taken a closer look at the main issues facing landlords, separating changes already confirmed from those that remain predictions.
Will Rental Income Tax Increase in 2027?
Yes. Higher income tax rates on rental profits are already confirmed for April 2027.
These changes were announced in the November 2025 Budget and have since been legislated.
From 6 April 2027, the income tax rates applying to property income in England, Wales and Northern Ireland will increase as follows:
| Tax band | Current rate | From April 2027 |
|---|---|---|
| Basic rate | 20% | 22% |
| Higher rate | 40% | 42% |
| Additional rate | 45% | 47% |
The increase applies to taxable rental profits rather than the total rent received.
For example, a basic-rate taxpayer with £10,000 in taxable rental profits would generally pay an additional £200 per year, assuming those profits fall entirely within the basic-rate band.
There is also a compensating adjustment for landlords with mortgages. The basic-rate tax reduction available for qualifying mortgage finance costs will increase from 20% to 22%.
Although the higher tax rates are unwelcome, the financial impact will depend on each landlord’s income, borrowing and individual circumstances.
Importantly, these changes generally affect properties owned personally. Rental profits earned through a limited company remain subject to corporation tax, with separate tax considerations when profits are withdrawn.
For further information, see the Government’s guidance on property income tax changes.
Will Stamp Duty Change in the Autumn Budget 2026?
Stamp Duty Land Tax (SDLT) is one of the biggest upfront costs facing buy-to-let investors in England and Northern Ireland.
Currently, buyers purchasing an additional residential property generally pay a five-percentage-point surcharge on top of standard residential stamp duty rates.
This can make a significant difference to the overall cost of investing, particularly for landlords purchasing lower-value properties where acquisition costs represent a larger percentage of the investment.
There has been speculation about wider stamp duty reform, including the possibility of replacing the existing system with an alternative approach to property taxation.
However, Prime Minister Andy Burnham has indicated that changes to stamp duty will not form part of this Budget.
Our expectation is that stamp duty rates and the existing additional-property surcharge will remain unchanged.
Although this would not reduce purchase costs for investors, it would provide some certainty for landlords currently considering a property purchase.
Will Capital Gains Tax Increase for Landlords?
Capital Gains Tax (CGT) has been another concern for property investors ahead of the Autumn Budget.
Landlords selling an investment property may be liable for CGT on the taxable gain, after accounting for allowable costs, reliefs and exemptions.
Currently, the main residential property CGT rates are:
- 18% for gains falling within the basic-rate band.
- 24% for gains falling within the higher-rate band.
There had been suggestions that the Government might increase these rates to raise additional revenue.
However, recent reports indicate that Chancellor John Healey has decided against increasing Capital Gains Tax in this Budget.
One concern surrounding higher CGT rates is that they could discourage property sales, with investors choosing to retain assets rather than incur a larger tax liability.
While nothing is final until the Chancellor’s announcement, the indications ahead of the Budget suggest a further CGT increase is unlikely.
For landlords thinking about selling or restructuring an existing portfolio, this could provide some welcome reassurance.
Could the Budget Help First-Time Buyers and the New-Build Market?
One potentially positive announcement for the wider housing market concerns the Government’s proposed Your First Home scheme.
The scheme is designed to help eligible first-time buyers purchase new-build homes in England.
The Government has outlined proposals that would allow qualifying purchasers to buy with deposits as low as 2.5%, supported by a government-backed equity loan of 20%.
Further details, including property price limits, income eligibility and the implementation timetable, are expected in the Budget.
Although this initiative is aimed at owner-occupiers rather than buy-to-let investors, it could have wider benefits for the housing market.
Supporting first-time buyer demand may help housebuilders increase sales volumes and improve confidence in new residential development.
For developers facing challenging market conditions, additional demand could be particularly welcome.
Whether the scheme results in a meaningful increase in housing transactions will depend on the final eligibility criteria and take-up.
What Could the Budget Mean for Buy-to-Let Mortgage Rates?
Mortgage interest rates remain one of the most important considerations for landlords.
Higher borrowing costs have squeezed rental profits in recent years, particularly for investors with larger mortgages or properties delivering relatively modest rental yields.
Although the Chancellor does not directly set mortgage rates, the Budget can influence financial markets and expectations for the wider economy.
The Office for Budget Responsibility will publish updated forecasts covering inflation, economic growth and government borrowing.
These forecasts, alongside the Government’s fiscal announcements, could influence financial market expectations and the cost of mortgage funding.
For landlords, this makes the wider economic reaction to the Budget worth watching.
Lower mortgage rates over time could help improve buy-to-let affordability and cash flow, although there is no guarantee that rates will fall following the announcement.
Is Buy-to-Let Still Worthwhile in 2026?
Given the combination of taxation, regulation and higher borrowing costs, it’s understandable that some investors are questioning whether buy-to-let property remains worthwhile.
However, we believe it is important to distinguish between the challenges facing the wider market and the potential returns available from individual properties.
Not all buy-to-let investments are equal.
A property purchased at an inflated price, with high service charges and a relatively low rental yield, may struggle to deliver attractive returns.
Conversely, a sensibly priced residential property in an area with established rental demand may offer a stronger starting position.
For investors considering a purchase, we believe several fundamentals remain particularly important:
- Purchase price: Buying at a competitive price, preferably below comparable market values.
- Rental yield: Looking beyond headline figures to understand the income remaining after realistic costs.
- Tenant demand: Selecting locations with established rental markets and sustainable demand.
- Property type: Considering maintenance costs, resale potential and long-term appeal to tenants.
- Borrowing costs: Stress-testing returns against mortgage interest rates and possible future changes.
- Long-term suitability: Avoiding investments that depend heavily on speculative capital growth.
At North Fox Property, our preference remains for straightforward residential investments, particularly established houses and sensibly priced properties offering realistic rental income.
We believe a disciplined approach to property selection is increasingly important in today’s market.
What Should Landlords Do Before the Autumn Budget?
With the Budget approaching, landlords may be tempted to make quick decisions about buying, selling or restructuring their property investments.
However, acting on speculation alone can create unnecessary costs.
For most investors, the sensible approach is to review existing property returns, understand forthcoming tax changes and assess whether their investments remain suitable for their longer-term objectives.
Anyone considering significant changes to property ownership or their tax arrangements should seek appropriate professional advice.
The full implications of the Budget will become clearer once the Chancellor has delivered his statement and the supporting Treasury documents are published.
Autumn Budget 2026: Frequently Asked Questions
When is the Autumn Budget 2026?
The UK Autumn Budget will take place on Wednesday 28 October 2026. Chancellor John Healey is expected to deliver his statement to the House of Commons at approximately 12.30pm.
Are landlords going to pay more income tax?
Yes. From April 2027, the income tax rates on property income in England, Wales and Northern Ireland will rise to 22%, 42% and 47%. These changes have already been confirmed and are separate from any new Budget announcements.
Will buy-to-let stamp duty increase in 2026?
There has been no confirmed announcement of an increase. The Prime Minister has indicated that changes to stamp duty are not planned for this Budget, although the final position will be confirmed in the statement.
Is Capital Gains Tax going up on second homes?
Recent reporting suggests that the Chancellor has decided against increasing Capital Gains Tax rates in the Autumn Budget 2026. However, the formal Budget announcement is still awaited.
Are limited-company landlords affected by the rental income tax increase?
The new personal property income tax rates will not directly apply to rental profits earned by limited companies. Companies remain subject to corporation tax, and shareholders may face personal tax when extracting profits.
Our View: What the Autumn Budget Means for Property Investors
While the buy-to-let market continues to face challenges, the indications ahead of the Autumn Budget are perhaps more encouraging than some landlords initially feared.
The rental income tax increase from April 2027 is already known, while reports suggesting no further rises to Capital Gains Tax or changes to stamp duty would provide a degree of welcome certainty.
There may also be some positive developments for the wider housing market, particularly through support for first-time buyers and new-build housing.
Ultimately, we believe the fundamentals of successful residential property investment remain unchanged.
Buying the right property, at the right price, in a location with strong tenant demand remains far more important than trying to predict short-term movements in the property market.
At North Fox Property, we continue to focus on sourcing sensibly priced residential investment opportunities with realistic rental potential and a clear understanding of the associated risks.
North Fox Property – Property expertise you can rely on.
Published: 27 October 2026. This article reflects information available ahead of the Autumn Budget and will require updating following the Chancellor’s statement. It is intended as general information rather than financial or tax advice.
