Landlord tax
Rental income tax increase 2027: how much more landlords will pay
Landlord tax
Income tax on rental profits is going up. From 6 April 2027, landlords who own property personally will pay 24% at the basic rate, 44% at the higher rate and 49% at the additional rate, four percentage points more than today. The 28 October 2026 Budget added two points on top of the rise already set for that date. Mortgage interest relief rises to 24% too, so how much more you pay depends on how much of your rent goes on interest.
| Band | Now (2026 to 2027) | From 6 April 2027 | Increase |
|---|---|---|---|
| Basic rate | 20% | 24% | +4 points |
| Higher rate | 40% | 44% | +4 points |
| Additional rate | 45% | 49% | +4 points |
| Mortgage interest relief | 20% | 24% | +4 points |
The rates apply to property income in England, Wales and Northern Ireland, and Scotland and Wales can set their own. They will be legislated in Finance Bill 2026 to 2027. Landlords who own through a limited company pay corporation tax instead, which did not change.
Enter your own figures. The calculator compares this tax year with 2027 to 2028 using the announced rates.
Extra tax a year from April 2027
£200
About £17 a month
Illustrative. Assumes all of your rental profit falls in the band you choose and that relief is limited to your rental profit. Your real bill depends on your total income, allowances and losses.
Illustrative examples, assuming all of the rental profit falls in one tax band and the landlord has other income that uses up the personal allowance.
| Landlord | Tax 2026 to 2027 | Tax 2027 to 2028 | Extra a year |
|---|---|---|---|
| Higher rate, £20,000 rent, £5,000 costs, £10,000 interest | £4,000 | £4,200 | £200 |
| Higher rate, £20,000 rent, £5,000 costs, no mortgage | £6,000 | £6,600 | £600 |
| Basic rate, £12,000 rent, £3,000 costs, £4,000 interest | £1,000 | £1,200 | £200 |
For the first example: rental profit before interest is £15,000. Today the tax is 40% of £15,000, £6,000, less 20% of the £10,000 interest, £2,000, giving £4,000. From April 2027 it is 44% of £15,000, £6,600, less 24% of £10,000, £2,400, giving £4,200.
Because the tax rate and the relief both rise by four points, the increase is roughly 4% of your profit after interest. A landlord whose rent mostly goes on interest sees a small rise; a landlord with no mortgage pays the full four points on their whole profit.
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Yes. From 6 April 2027, property income is taxed at 24%, 44% and 49% instead of 20%, 40% and 45%, for landlords who own property personally in England, Wales and Northern Ireland.
Roughly 4% of your rental profit after mortgage interest, because both the tax rates and the mortgage interest relief rise by four points. A higher-rate landlord with £20,000 rent, £5,000 costs and £10,000 interest would pay about £200 more a year.
It stays aligned to the property basic rate, so it rises from 20% to 24% from 6 April 2027.
No. Companies pay corporation tax, which stays at 19% to 25%.
It depends on your circumstances. Transferring property is usually treated as a sale at market value and can trigger capital gains tax, stamp duty and refinancing costs. Speak to a qualified tax adviser before deciding.
Yes. PROXERA tracks every property’s income, costs and mortgages, our in-house accounts team can look after your accounts, and we can introduce you to tax advisers and mortgage brokers. Book a free property review to start.
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Book a free property review. We will look at your portfolio with you and, where you need it, introduce you to the right tax adviser, accountant or mortgage broker.
Information, not advice. This article is general information based on the Budget documents published on 28 October 2026. Announced rates still need to be passed into law. It is not a personal recommendation and does not constitute financial, investment, mortgage, tax or legal advice. Speak to a qualified tax adviser about your own position.
