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UK Budget Implications for Landlords: What You Need to Know

Landlords
Posted in   Sep 30 , 2025
Uk budget implications for landlords

The UK Autumn Budget is just around the corner, and, like every year, new policies are expected this year to affect landlords. Changes to Stamp Duty Land Tax (SDLT) and new shifts in income tax thresholds, capital gains tax (CGT), and adjustments to mortgage rules are anticipated. Whilst some rules will help maximise the government's revenue, others will help improve housing supply and tenants' rights. 

Landlords need to stay informed about budget changes and consider addressing complaints related to new rules to protect rental yields and ensure their investment remains profitable. In this blog, we break down the key UK budget implications for landlords, providing insights we have so far, so you can plan effectively.

Stamp Duty Land Tax (SDLT) Changes

Landlords interested in buy-to-let or second-home investments are often curious about stamp duty. In the recent budget, the official rule stated:

  • 3% increase in the surcharge on the additional property.

  • Reduction in the threshold for the SDLT exemptions, which means that landlords will now pay early tax on lower-value properties. 

To illustrate this with an example: If you are purchasing a £300,000 buy-to-let property, you will need to pay thousands more in terms of SDLT, which was lower a few years ago. Although these changes have affected small landlords by discouraging them from building more portfolios, big investors will continue to squeeze the margins.  

Income Tax on Rental Profits

Due to changes in income tax bands, landlords who earn income from their rental properties will be affected. With recent budgets tightening the thresholds, more landlords are getting pushed to pay high taxes as their rental income rises with inflation.

What this means for landlords:

  • They may need to pay 40% tax on their rental income even if their actual income has not increased. 

  • The basic rate for the taxpayer will be shifted to a higher tax rate category over time. 

Mortgage Interest Relief and Section 24

After the changes in Section 24 phased out the full mortgage interest relaxation, it was then replaced with a flat 20% tax credit, and budgets have remained in place since then. For landlords who have large mortgages, the impact can be drastic. For example:

  • A landlord who pays £10,000 in mortgage interest annually will not be able to deduct the entire amount before tax.

  • Now, they will receive a 20% credit to increase their taxable income and liabilities. 

 Capital Gains Tax (CGT) Adjustments

Whenever the landlords sell the property, capital gains tax plays a key role in determining the profits. As per the recent budgets:

  • The annual exemption allowance is lowered. 

  • CGT liabilities are increased for high-taxpayers on second properties.

Energy Efficiency and Property Standards

The focus of the budget is to highlight sustainability, putting landlords under pressure to meet the energy efficiency standards (EPC ratings). The exact deadlines may vary, but property owners will now need to invest in insulation, heating upgrades, and eco-friendly technologies. Failure to comply with these rules can result in hefty fines. 

Practical Steps for Landlords

To manage the impact of budget changes, landlords should:

  • Determine whether personal ownership or a limited company is more tax-efficient.

  • Ensure all allowable costs are claimed.

  • Be mindful of CGT thresholds and timing.

  • Budgets are annual, and changes can be announced with little notice.

  • Accountants or property managers can help minimise risk.

Frequently Asked Questions About the UK Budget 

1. How do UK Budget changes usually affect landlords?
Budgets often come with changes to taxes, such as SDLT, income tax, and CGT. For an average landlord, this could indicate higher costs when purchasing a property, reduced net rental income, and additional expenses when selling the property. 

2. Should I consider moving my properties into a limited company?
It’s a good idea, as many landlords are exploring this option, as it allows mortgage interest to stay deductible. However, it is advisable to seek help from Cribs Estates to determine what is best for your specific circumstances. 

3. Will the UK Budget affect smaller landlords differently from large portfolio landlords?
Yes, the small landlords will face the heat because they have fewer properties spread across, so the cost will go high. Landlords with a large portfolio will enjoy flexibility, but may also gain overall exposure to the tax changes. 

How Cribs Estates Can Help Landlords

Our team at Cribs Estates understands that keeping up with tax and regulatory changes can become exhausting. We are a South-London-based letting agent providing landlords:

  • Complete guidance on the lincesing and compliance. 

  • Support to ensure rental yields are maximised without high tax pressure. 

  • Advice on structuring a rental business to increase profits. 

  •  Day-to-day property management, so you can focus on your investments without worrying about missed deadlines or costly mistakes.

Give your mind peace and hire Cribs Estate so we can safeguard your rental income and keep your properties on the right track with compliance.


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UK Budget Implications for Landlords: What You Need to Know

The UK Autumn Budget is just around the corner, and, like every year, new policies are expected this year to affect landlords. Changes to Stamp Duty Land Tax (SDLT) and new shifts in income tax thresholds, capital gains tax (CGT), and adjustments to mortgage rules are anticipated. Whilst some rules will help maximise the government's revenue, others will help improve housing supply and tenants' rights. Landlords need to stay informed about budget changes and consider addressing complaints related to new rules to protect rental yields and ensure their investment remains profitable. In this blog, we break down the key UK budget implications for landlords, providing insights we have so far, so you can plan effectively.Stamp Duty Land Tax (SDLT) ChangesLandlords interested in buy-to-let or second-home investments are often curious about stamp duty. In the recent budget, the official rule stated:3% increase in the surcharge on the additional property.Reduction in the threshold for the SDLT exemptions, which means that landlords will now pay early tax on lower-value properties. To illustrate this with an example: If you are purchasing a £300,000 buy-to-let property, you will need to pay thousands more in terms of SDLT, which was lower a few years ago. Although these changes have affected small landlords by discouraging them from building more portfolios, big investors will continue to squeeze the margins.  Income Tax on Rental ProfitsDue to changes in income tax bands, landlords who earn income from their rental properties will be affected. With recent budgets tightening the thresholds, more landlords are getting pushed to pay high taxes as their rental income rises with inflation.What this means for landlords:They may need to pay 40% tax on their rental income even if their actual income has not increased. The basic rate for the taxpayer will be shifted to a higher tax rate category over time. Mortgage Interest Relief and Section 24After the changes in Section 24 phased out the full mortgage interest relaxation, it was then replaced with a flat 20% tax credit, and budgets have remained in place since then. For landlords who have large mortgages, the impact can be drastic. For example:A landlord who pays £10,000 in mortgage interest annually will not be able to deduct the entire amount before tax.Now, they will receive a 20% credit to increase their taxable income and liabilities.  Capital Gains Tax (CGT) AdjustmentsWhenever the landlords sell the property, capital gains tax plays a key role in determining the profits. As per the recent budgets:The annual exemption allowance is lowered. CGT liabilities are increased for high-taxpayers on second properties.Energy Efficiency and Property StandardsThe focus of the budget is to highlight sustainability, putting landlords under pressure to meet the energy efficiency standards (EPC ratings). The exact deadlines may vary, but property owners will now need to invest in insulation, heating upgrades, and eco-friendly technologies. Failure to comply with these rules can result in hefty fines. Practical Steps for LandlordsTo manage the impact of budget changes, landlords should:Determine whether personal ownership or a limited company is more tax-efficient.Ensure all allowable costs are claimed.Be mindful of CGT thresholds and timing.Budgets are annual, and changes can be announced with little notice.Accountants or property managers can help minimise risk.Frequently Asked Questions About the UK Budget 1. 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