UK Budget raises property income tax to 24%, 44% and 49% from April 2027

Chancellor John Healey's Budget on 28 October 2026 raises income tax on property income by two percentage points from 6 April 2027, to 24% at the basic rate, 44% at the higher rate and 49% at the additional rate. The same Budget confirms £4.7bn for a new Your First Home equity loan scheme for first-time buyers of new-build homes. The official Budget and tax pages set out the rates and funding, and trade press has reported the reaction.

Property income rates rise to 24%, 44% and 49%

The Budget document says the 2025 Budget had already raised these rates by two points from April 2027, and this Budget adds a further two. Official tax guidance lists the new property rates as 24% basic, 44% higher and 49% additional, applying from the 2027 to 2028 tax year.

For individuals, the rates cover England, Wales and Northern Ireland. The Scottish and Welsh governments can set their own property income rates under their fiscal frameworks. The change is set for April 2027, so it does not affect the current tax year.

The official tax page shows the property measure raising £35m in 2027 to 2028, £575m in 2028 to 2029 and £455m in 2031 to 2032. Savings income moves to the same three rates from April 2027 across the UK, and property trusts are listed at 49%.

Who is affected, and the interest deduction

The Budget document says 84% of income tax payers are unaffected by the property and savings changes, and that around half of the revenue from this change is expected to come from the top 10% of households. The tax page estimates that by 2031 to 2032 about 2.4 million landlords, or 5% of taxpayers, will face a change from the property measure.

The tax page puts the average rise in 2027 to 2028 at £225 a year for about 5% of taxpayers. It says people aged 55 or over are overrepresented in the impacted population: 63%, against 39% of UK adults.

Section 24 is not covered in the official Budget or tax pages cited here, and no change to it has been confirmed. Heather Powell of Blick Rothenberg, quoted by The Negotiator, says the interest deduction is 'restricted to the basic rate'.

Your First Home: £4.7bn of equity loans for new-build buyers

The Budget document says the government is confirming £4.7bn for the scheme, which aims to help 70,000 households onto the housing ladder. Propertymark reports 20% equity loans with five years interest-free, and deposits of at least 2.5% and no more than 15%.

The Negotiator reports income caps of £110,000 outside London and £140,000 inside London. It reports price caps of £650,000 in inner London and £500,000 in outer London, based on local authority median prices.

The Budget document sets the timetable: pre-registration opens by the end of December 2026, full applications run from February 2027, and first loans are issued from April 2027. The Negotiator says the scheme launches in spring 2027. Propertymark also reports that the Office for Budget Responsibility judges Your First Home will have only a marginal effect on overall housing supply, while potentially raising house prices slightly.

Stamp duty reports and reaction from the sector

Trade reporting says the Budget made no stamp duty cuts or reforms. The Negotiator, citing Paul Hardy of LSL, also says the rate on second-home purchases rose from 3% to 5%, effective immediately. That second-home change does not appear in the official pages cited here.

Timothy Douglas, head of policy and campaigns at Propertymark, calls the rise a 'steep and punitive rise in income tax on property income'. Mr Douglas also says that, as the Office for Budget Responsibility has pointed out, the tax rise 'will result in a steady, long-term rise in rents'.

The property rates apply from 6 April 2027.