Diane’s Nottinghamshire Property Blog
New Tax Changes: What the Latest Budget Means for Landlords & Property Investors
The Government has unveiled a raft of new tax changes that will directly affect landlords and property investors across the UK — and the financial impact is expected to be significant.
Under the latest proposals announced by the Chancellor, income tax on rental earnings is set to rise by an additional two percentage points from April 2027. This means landlords will take home less profit from their rental income, at a time when operating costs are already at historic highs. The Office for Budget Responsibility has already acknowledged that these changes are likely to place further strain on the private rental sector — with rent increases almost inevitable as landlords attempt to balance the books. Not great news for tenants.
High-Value Property Surcharge – Another Cost Burden
Another major change is the introduction of a High-Value Council Tax Surcharge on properties valued at over £2 million. Crucially, this surcharge will be charged directly to property owners, not occupiers. For landlords holding premium property assets, this represents yet another annual cost that must be absorbed or passed on.
Wider Impact on Landlords & Investors
These changes arrive at a time when landlords are already navigating:
- The loss of mortgage interest tax relief
- Increased licensing schemes and compliance costs
- Rising maintenance, insurance and service charges
- The incoming Renters’ Rights reforms, including the end of Section 21
- Tighter rules on rent increases and possession processes
For many smaller landlords, the combined effect of higher taxation and heavier regulation may well push them out of the market altogether. This could lead to:
- Reduced housing supply
- Increased competition for rental properties
- Upward pressure on rents
- Greater dominance of larger corporate landlords
For investors, the landscape is changing fast. Profit margins are tightening, and future investment decisions will rely heavily on:
- Long-term yield rather than short-term gain
- Creative structuring through limited companies
- Strong local knowledge of licensing and demand
- Professional property management to ensure compliance
My Advice to Landlords Right Now
Now more than ever, landlords should be:
- Reviewing their portfolio performance
- Stress-testing finances against future tax rises
- Seeking specialist tax and property advice
- Making sure properties are fully compliant and well managed
- Planning ahead rather than reacting later
The private rented sector is going through its biggest transformation in decades. Those who adapt strategically will still find opportunity — but the days of “hands-off” landlordism are well and truly over.
In the words of Catherine Tate ‘Am I Bovvered?’ No I’m not. I have a plan, am creative and have vast experience in navigating changes within the PRS.
I would love to have a chat and see if we can support you through this quagmire that has been thrust upon us.
As always,
Kindest Diane
