November Budget 2025: What landlords need to know

Understandably, landlords have been anxious. There were threats from all areas, including the introduction of NI for landlords, Stamp Duty (SDLT) increases, and increases in income taxes, on top of the Rental Reform changes announced earlier this year.

The sustained speculation since August (around 12 leaks in all since) has also had a direct impact on the property market. It’s slowed. We can see it in the market figures, and in the conversations we’ve had with clients. In fact, it’s only the clients following a high-risk strategy who have swerved the slow down. 

As it turns out, there’s not been the avalanche of tax hits people were predicting. But that doesn’t mean landlords are off the hook. There are some notable changes to be aware of, and if you need help deciding the right course of action for you, then book a Bespoke Tax Consultation with our property tax experts.

Let’s start with the personal tax thresholds. What do landlords need to know?

1. The tax-free personal threshold of £12,570 will remain frozen until 2030-31, an extension from the original pledge of freezing it until 2028. This acts as a ‘stealth tax’ and means people will pay more tax. 

2. Tax rates on property and savings income will increase by two percentage points  from April 2027. This follows various measures over the past 10 years that have also reduced returns to private landlords.

3. The basic rate of dividend income has risen from 8.75% to 10.75%, while the higher rate has moved to 33.75% to 35.75%. This comes into effect from April 2026.

My view 

Landlords have faced higher costs for several years and so today’s news will impact post-tax income. This could unsettle landlords further as they try to get a handle on the costs associated with the Renters’ Rights Act and new energy efficiency regulations. And it all comes after the Chancellor raised stamp duty on the purchase of additional homes, from 3% to 5%, in last year’s Budget. 

However, there is some light. Rents continue to rise and are 25% up over the last 5 years. Landlords will need to tread their path carefully and ensure costs don’t erode the gains.

Next up, Mansion Tax

From 2028, properties valued at over £2m will pay a £2,500 annual charge in addition to existing council tax charges. This will rise to £7,500 on properties valued at over £5m. This surcharge will be collected alongside council tax. Less than 1% of properties in England will fall into the Mansion Tax bracket.

My view 

Introducing a Mansion Tax could be viewed as a political move more than anything. Bearing in mind the relatively low amount of additional revenue the Treasury will raise, and the likely deferred payment date, the impact on overall housing market activity will be minimal, at worst.

What wasn’t mentioned? 

It will come as a relief to landlords that there will be no changes to stamp duty. Buyers in England and Northern Ireland continue to pay Stamp Duty on homes priced above £125,000, with first-time buyers retaining a £300,000 threshold on properties costing £500,000 or less. 

It was confirmed that there will be no new annual tax on properties valued above £500,000. Another relief, particularly for the 210,000 homeowners currently trying to sell for more than £500,000. 

We should see a shift in buyer confidence, especially in London and South England given the concentration of higher value housing stock. Sellers won’t need to adjust their asking prices to absorb an annual charge either. This should preserve affordability for purchasers. It also avoids the ‘cliff-edge effect’ where demand could have bunched just below the £500,000 threshold and softened above it.

In short, continuity may offer the market a steadier footing, even if it is not quite as exciting as some had hoped.

Making Tax Digital wasn’t mentioned. Take it as read that it’s happening. If you are among the 3million landlords in scope, then you need a plan to get digital bookkeeping and quarterly returns done online. Our blog explains exactly what you need to know, and what you need to do to comply. 

My takeaway

Landlords continue to be the target of taxation changes. Long-term it could deter people from investing in property and therefore a reduction in rental housing stock. 

And, despite claims of tackling cost of living pressures, the Government is pursuing a policy that the Office Budget Responsibility has made clear will drive up rents. 

Almost 1million new rental homes are needed by 2031. However, this Budget will leave tenants with higher costs while doing nothing to improve access to the homes people need.

So my message to landlords remains the same; continue to review your portfolio and, based on your individual circumstances, ensure you are purchasing properties in the most tax efficient manner not only for the short term but also with long term goals in mind. 

If you have a personally held portfolio then review what the new 2% income tax rise will mean in real terms. Is your portfolio still profitable? Is it worth incorporating to a limited company? Or should you sell some of the weaker performing properties. If selling is an option, then time it to be tax efficient. 

Got questions? Our team of Pros can help you arrive at a strategy that’s right for you. Book a Bespoke Tax Consultation today to get peace of mind and set the best direction for your personal goals.