Landlord Tax 2027: The New 22/42/47% Property Rates
From 6 April 2027 rental profit in England & NI is taxed at dedicated property rates, the Section 24 credit becomes 22% and the £30k MTD wave begins. Who it hits, in pounds.
The short answer
From 6 April 2027 rental profit in England and Northern Ireland is taxed at new dedicated property rates of 22% / 42% / 47% — two percentage points above the 20/40/45 you pay in 2026/27. The Section 24 mortgage-interest credit rises to 22% at the same time, and the £30,000 MTD wave starts the same day.
This is the page for “landlord tax 2027” — written a tax year early, from the gov.uk measures page rather than from speculation, and updated as the Finance Bill 2027 detail lands.
What changes on 6 April 2027
| Measure | 2026/27 → 2027/28 |
|---|---|
| Property income basic rate | 20% → 22% |
| Property income higher rate | 40% → 42% |
| Property income additional rate | 45% → 47% |
| Section 24 finance-cost credit | 20% → 22% |
| Savings income rates | +2 percentage points (same package) |
| Personal allowance | £12,570 — frozen to April 2031 |
| MTD for Income Tax | £30,000 gross wave mandated (tested on 2025/26 income) |
| CGT, SDLT/LBTT/LTT, dividends | No announced change for April 2027 |
Who it applies to
Taxpayers in England & Northern Ireland taxpayers. Scottish residents keep Scotland’s own bands on rental profit; Wales retains its rate-setting power. Limited companies are untouched — they pay Corporation Tax.
In pounds — three landlords
| Landlord | Tax on rental profit |
|---|---|
| Basic-rate, £8,000 profit, no mortgage | £1,600 → £1,760 (+£160) |
| Higher-rate, £15,000 profit, £6,000 interest | Tax on profit £6,000 → £6,300; credit £1,200 → £1,320; net +£180 |
| Additional-rate, £40,000 profit, £12,000 interest | £18,000 → £18,800; credit £2,400 → £2,640; net +£560 |
Preview your own figures: the rental income tax calculator has a 2027/28 toggle that applies these rates and the 22% credit.
What it does not mean
- Not a 2026 rise. Anything you read saying rent is “now” taxed at 22% is a year early.
- Not National Insurance. NIC on rental income was rumoured and not introduced.
- Not CGT. Residential CGT stays at 18/24% with the £3,000 exempt amount.
Should you incorporate before April 2027?
The gap between the personal rates and Corporation Tax widens, but April 2026’s dividend-rate rise (10.75/35.75%) made extracting profits dearer, and moving existing properties into a company triggers CGT and stamp duty. It is a numbers question — both sides moved. We will publish a personal-vs-company comparison calculator; until then, model both in a spreadsheet before paying for advice.
Dates to watch
- Autumn Budget 2026 (expected November) — the last chance for the 2027 package to change.
- Finance Bill 2027 — legislates the rates; we will update this page when it is published.
- 6 April 2027 — new rates, 22% credit, £30k MTD wave.
- 31 January 2029 — first self-assessment/final declaration on 2027/28 income.
gov.uk “Changes to tax rates for property, savings and dividend income” (Autumn Budget 2025 measure, read verbatim); gov.uk MTD mandation timeline; Finance Act 2026. Checked 2026-08-29; re-checked 31 Aug 2026.
Quick answers
22% / 42% / 47% on property income for England and Northern Ireland taxpayers — a separate schedule of property rates, two points above the ordinary rates. Scotland and companies are unaffected.
The Section 24 credit rises from 20% to 22% alongside the new rates. It remains a credit, not a deduction.
No. In 2026/27 rental profit is taxed at 20/40/45%. The 22/42/47% property rates start on 6 April 2027.
No such measure has been announced. It was rumoured before the 2025 Budget and not introduced.