Landlord Tax Changes 2026/27 — What Actually Happened
Half the internet says landlord tax went up; the sourced truth is stranger. The new 22/42/47% property rates start April 2027, dividends rose this April, and NIC on rents was dropped — the dated timeline.
The November 2025 Budget produced the most confused landlord-tax coverage in years — because it raised taxes on landlords and didn’t, depending entirely on which year you mean. We read the gov.uk measures page and the Finance Act coverage so you don’t have to guess. Here is what actually happened, dated.
The one-table version
| Measure | 2026/27 (now) | What’s coming |
|---|---|---|
| Property income rates (E&NI) | 20% / 40% / 45% — unchanged | 22% / 42% / 47% from 6 Apr 2027 — new dedicated property rates |
| Section 24 finance-cost credit | 20% | 22% from 6 Apr 2027 |
| Dividend rates | 10.75% / 35.75% — rose 6 Apr 2026 (39.35% top unchanged) | — |
| NIC on rental income | Not introduced — rumour died at the despatch box | — |
| Savings income rates | unchanged | +2pp from 6 Apr 2027 |
| Personal allowance | £12,570 | frozen to April 2031 (extended) |
| CGT on residential | 18% / 24%, £3,000 AEA — unchanged | — |
| SDLT / LBTT / LTT | unchanged | — |
| MTD for Income Tax | LIVE — £50k gross wave since 6 Apr 2026 | £30k Apr 2027 · £20k Apr 2028 |
gov.uk “Changes to tax rates for property, savings and dividend income” (read verbatim 29 Aug 2026) · Finance Act 2026 (Royal Assent 18 Mar 2026) · Deloitte & ICAEW Budget analyses · gov.scot 2026/27 factsheet.
The property-rates change, precisely
gov.uk’s own wording: “From April 2027, the property basic rate will be 22%, the property higher rate will be 42% and the property additional rate will be 47%.” Three things follow:
- Nothing changes on your 2026/27 rental tax. Anyone telling you rents are “now taxed at 22%” is a year early — and anyone unaware of 2027 is a year late.
- It’s England & Northern Ireland. Scotland sets its own non-savings rates (19–48% in 2026/27) and Wales retains its own rate-setting power.
- Section 24 tracks it: the finance-cost credit rises to 22% alongside — slightly better for higher-rate landlords, still far below their new 42/47% marginal rates.
What it means in pounds
A higher-rate landlord with £10,000 of rental profit and no mortgage pays £4,000 on it in 2026/27 — and £4,200 from 2027/28. With £6,000 of mortgage interest the 2027 arithmetic is +£200 tax but +£120 extra credit: the net squeeze is real but smaller than headlines suggest. Preview your own numbers with the calculator’s 2027/28 toggle.
What did rise this year
Dividends. From 6 April 2026 the ordinary rate is 10.75% and the upper rate 35.75%. For company-structure landlords this is the quiet tax rise of 2026/27 — extraction just got dearer, exactly as the personal-vs-company decision was becoming more attractive on the 2027 rates. The comparison now has moving parts on both sides; anyone claiming a universal answer is selling something.
Also in force this year (from earlier Budgets)
- FHL regime abolished (April 2025): holiday lets now follow ordinary rules — full Section 24 restriction, no special capital allowances, no BADR on sale.
- MTD is live — and HMRC began auto-enrolling ~290,000 non-signed-up landlords from September 2026. Check your date.
NIC-on-rents: confirmed not introduced (Deloitte Taxscape Budget coverage). FHL abolition: gov.uk policy paper. MTD auto-enrolment: HMRC announcements, late Aug 2026.
Quick answers
Property income tax: no — 2026/27 uses the same 20/40/45% bands as last year. What rose this April is dividend tax (10.75%/35.75%). The property rise is scheduled: dedicated 22/42/47% property rates from 6 April 2027 in England & NI, with the Section 24 credit moving to 22% alongside.
No. It was heavily rumoured before the November 2025 Budget and explicitly not introduced — Budget analyses state it directly. Rental income remains outside Class 2 and Class 4 NIC.
No — they're England & Northern Ireland measures. Scottish residents pay Scotland's own bands (19–48% in 2026/27) on rental profit, set by the Scottish Budget each January. Wales also retains its own rate-setting power.
The 2027 rates sharpen the question — companies keep full mortgage-interest deduction and pay Corporation Tax (19/25%) — but this April's dividend-rate rise made extracting profits dearer, and incorporation triggers CGT and stamp duty on the transfer for most existing portfolios. It's a genuine adviser question with real numbers on both sides; run both scenarios in our calculator first, then buy an hour of professional advice, not a webinar.