The 2025 Budget offers a stable outlook for property owners while signalling gradual changes that will influence buying, selling, and letting decisions over the next few years. With most day-to-day costs remaining unchanged, homeowners and landlords have time to plan, understand upcoming legislation, and make informed decisions.
Nicholas Humphreys outlines the main updates and explains what they mean for your property and investment strategies.
A new council tax surcharge for high-value homes
One of the most significant announcements affects properties in England valued above £2 million. From April 2028, these homes will be subject to a High Value Council Tax Surcharge, based on updated VOA valuations due in 2026. Annual charges will range from £2,500 to £7,500, impacting roughly 100,000 homes, mostly in London and the South East.
For most homeowners outside this bracket, the immediate effect will be minimal, providing time to plan for the longer-term implications.
Stamp Duty and ownership costs remain stable
Despite speculation ahead of the Budget, Stamp Duty Land Tax rates and thresholds remain unchanged, with no new charges for homes above £500,000, apart from the high-value surcharge from 2028.
This stability allows buyers, sellers, and movers in 2025–2026 to proceed with predictable costs and familiar budgeting expectations.
Rental income tax increases from 2027
Landlords in England, Wales, and Northern Ireland will see a 2-percentage-point increase across all income tax bands from April 2027:
- Basic rate rises to 22%
- Higher rate rises to 42%
- Additional rate rises to 47%
Scotland is unaffected due to its separate tax system. While day-to-day lettings management remains unchanged, the rise will influence long-term returns, portfolio planning, and potential future acquisitions.
Extended support for commercial landlords
From April 2026, smaller retail, hospitality, and leisure units in England with rateable values under £500,000 will benefit from permanently reduced business rate multipliers. This replaces temporary relief schemes and provides greater certainty for commercial landlords planning.
The enduring strength of the UK property market
Even with upcoming tax adjustments, property fundamentals remain solid:
- Strong tenant demand in many regions
- Limited rental stock keeping yields attractive
- Opportunities for long-term capital growth
- Bricks-and-mortar assets providing stability amid economic uncertainty
Property continues to be a dependable investment option for both homeowners and landlords, with opportunities for steady returns and growth.
Regional differences in impact
The £2 million+ council tax surcharge is concentrated in London and the South East. In most other regions, properties at this level are rare, so the effect on day-to-day property activity is limited.
With Stamp Duty unchanged, most buyers and sellers can transact under familiar rules, ensuring continuity in local markets.
Legislation beyond the Budget to monitor
Renters’ Rights Act (2025–2026)
Significant updates to tenancy law are expected, reshaping landlord and tenant responsibilities. Nicholas Humphreys will provide ongoing guidance as the legislation develops. Read our full guide to the Renters’ Rights Act.
Making Tax Digital (April 2026)
Landlords and self-employed property owners must maintain digital records and file income through approved software. Preparing early will ensure a smooth transition and reduce administrative pressures.
What property owners should consider next?
The 2025 Budget introduces measured changes rather than sudden disruptions:
- Stamp Duty and standard property costs remain steady into 2026
- Homes below £2 million are largely unaffected
- Landlords should plan for the 2027 rental income tax rise
- Commercial landlords gain certainty with permanent multipliers
- Digital tax reporting begins in 2026
Nicholas Humphreys’ local expertise helps property owners navigate these changes, plan effectively, and make informed decisions in a market that continues to offer opportunity.
