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Chancellor Raises Property Income Tax 2% From April 2027

By Drooid · Oct 28, 2026 · How we work

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Summary

Chancellor John Healey announced a 2 percent rise in property-income tax effective April 2027.
The basic rate will become 24 percent, the higher rate 44 percent, and the additional rate 49 percent.
Treasury expects the combined 4 percent increase to generate about £1 billion each year.
The Office for Budget Responsibility warned the hike could cause a steady rise in rents.
Industry leaders called the measure the final nail in the coffin for buy-to-let landlords.

History

The 1963 Finance Act first removed Schedule A’s imputed-rent tax, ending a long-standing levy on owner-occupiers. Decades later, the 2010 Finance Act added a 50 percent “additional rate” to income tax, showing the Treasury’s willingness to raise top brackets. The 2006 Finance Act introduced REITs, obliging property trusts to distribute 90 percent of income, a precedent for today’s 2027 proposal to lift property-income tax rates.

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The 1963 Finance Act first removed Schedule A’s imputed-rent tax, ending a long-standing levy on owner-occupiers. Decades later, the 2010 Finance Act added a 50 percent “additional rate” to income tax, showing the Treasury’s willingness to raise top brackets. The 2006 Finance Act introduced REITs, obliging property trusts to distribute 90 percent of income, a precedent for today’s 2027 proposal to lift property-income tax rates.

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