The 2025 Budget introduced several updates affecting the housing sector, although the overall impact on buyers, sellers and landlords is relatively limited. Most measures apply only to specific types of property or will not take effect for some time. For anyone looking to buy, sell or let a home, the near-term market remains stable.
Lovelle outlines the main announcements, explains what they mean for the broader property market and highlights why confidence among homeowners and investors remains well-placed.
High-value property surcharge coming in 2028
The government has confirmed a new High Value Council Tax Surcharge, also known as a mansion tax, for England. From April 2028, homes valued at £2m+ or more, based on 2026 VOA valuations, will incur an additional annual charge of between £2,500 and £7,500.
Approximately 100,000 homes are expected to be affected, primarily in higher-value regions. For people buying or selling today, there is no immediate impact due to the long lead-in period.
No new taxes for homes above £500,000 and no changes to stamp duty
The Autumn Budget did not introduce any new taxes for properties valued above £500,000. The only new property charge confirmed is the high-value council tax surcharge for homes worth more than £2,000,000, which will take effect from April 2028.
Stamp Duty Land Tax also remains unchanged, with no adjustments to rates or thresholds.
Although there had been speculation about broader property tax changes or stamp duty reform, none were announced. As a result, the current costs and rules for buying and selling property will continue into 2026.
Rental income tax increases arriving in April 2027
Landlords in England, Wales and Northern Ireland will see rental income tax rates rise from April 2027, with each band increasing by 2 percentage points.
- The basic rate becomes 22% (from 20%)
- The higher rate becomes 42% (from 40%)
- The additional rate becomes 47% (from 45%)
Scotland is not affected as it sets its own income tax structure.
Support confirmed for commercial and mixed-use landlords
The government has made permanent the reduced business rate multipliers for retail, hospitality and leisure properties in England that have a rateable value below £500,000. This support will begin in April 2026, replacing the temporary RHL relief.
Why property remains a strong long-term investment
Even with future tax adjustments on the way, property continues to offer reliable long-term returns. Investors benefit from:
- Strong and sustained rental demand driven by demographic trends and limited housing supply
- Competitive yields in areas with restricted rental stock
- The potential for long-term capital growth
- A stable and tangible asset that often performs better than financial markets during uncertain periods
With clear planning and support from Lovelle, landlords can continue to achieve consistent and dependable results.
Regional impact mainly focused on high-value areas
Because the new surcharge applies only to properties valued at more than £2,000,000, its impact will be centred on London and the South East, where most homes exceed this threshold. Across the rest of the UK, very few properties fall into this category, meaning the direct effect on regional markets is limited.
With stamp duty remaining unchanged, most buyers and sellers can expect continuity going into 2026.
Key reforms set to influence the market
Although the Budget outlines long-term tax adjustments, other legislative changes are expected to have a more immediate effect on landlords and tenants.
Renters’ Rights Act expected in 2025 and 2026
This legislation will reshape tenant and landlord rights and responsibilities. Lovelle provides detailed guidance to help clients understand the upcoming changes. Read our full guide to the Renters’ Rights Act
Making Tax Digital from April 2026
Landlords and self-employed property owners will need to switch to digital tax reporting. Lovelle is preparing resources and support to ensure a smooth transition.
In summary
The 2025 Budget introduces several property-related measures, although most will not take effect for a number of years. The key points include:
- Stamp duty rates and thresholds remain unchanged
- There are no new taxes for residential properties valued above £500,000
- The annual surcharge for homes valued above £2,000,000 begins in April 2028
- Rental income tax rates increase from April 2027
Despite these future adjustments, the property market remains resilient, supported by strong rental demand and stable long-term fundamentals.
Lovelle continues to guide landlords and homeowners with expert advice, helping you plan and make the most of a market that still offers significant opportunity.
