The 2025 Budget arrives at a time when many homeowners and landlords are looking for clarity. While the headline message is one of steady conditions in the short term, several policy changes are set to shape the market over the next few years.
Rather than sweeping reforms, this Budget introduces gradual shifts that will have different implications depending on where you own property, how you let it and what your long-term plans are. Mullucks breaks down the key developments so you can understand the road ahead with confidence.
New surcharge for £2m+ homes
The most significant announcement pertains to properties worth more than £2 million. From April 2028, these homes in England will be subject to a new High Value Council Tax Surcharge.
The charge will range from £2,500 to £7,500 a year and will use updated VOA valuations released in 2026.
Only around 100,000 homes fall within this bracket, with most located in London and the South East. For the majority of homeowners in Hertfordshire, Essex and surrounding areas, this change is unlikely to have any direct impact.
No immediate changes to buying costs
Although speculation before the Budget hinted at possible reforms, Stamp Duty Land Tax remains untouched.
There are also no new taxes for properties valued above £500,000, beyond the separate surcharge affecting £2 million-plus homes from 2028.
This means anyone planning to buy or sell in the near term can work with stable and familiar purchasing costs.
Tax increases for rental income from 2027
Landlords across England, Wales and Northern Ireland will see their rental income taxed at higher rates from April 2027. Each income tax band will rise by 2 percentage points.
- The basic rate will move from 20% to 22%
- The higher rate will move from 40% to 42%
- The additional rate will move from 45% to 47%
Scotland remains unaffected due to its devolved tax system.
These changes do not alter day-to-day management, but they will influence long-term yields and portfolio planning, particularly for landlords with higher taxable income.
New support measures for commercial property owners
From April 2026, reduced business rate multipliers for retail, hospitality and leisure spaces in England will become permanent for properties with a rateable value under £500,000.
This provides extended support for landlords with small to mid-sized commercial units and replaces temporary reliefs that were previously renewed every year.
How the Budget affects regions differently
Because the new surcharge targets only the highest-value homes, its impact is concentrated in a narrow part of the market.
Outside London and the South East, very few properties reach the £2 million threshold, meaning the change will have little effect on property activity in most towns and cities.
With stamp duty untouched, the broader transactional market remains steady across England.
Additional reforms that landlords should watch
Two major pieces of legislation will influence the property market ahead of the tax changes.
The Renters’ Rights Act progressing through 2025 and 2026
This significant update to tenancy law will reshape responsibilities for both landlords and tenants. Mullucks will keep landlords informed with clear guidance as the legislation develops. For a deeper understanding, see our complete guide to the Renters’ Rights Act.
Making Tax Digital arriving in April 2026
Many landlords will need to maintain digital records and file returns through approved software. Preparing early will help ensure a smooth transition.
How to plan your next steps
The Budget does not deliver sudden adjustments, but it does outline the direction of travel for property taxation over the coming years. For landlords, now is a good time to review expected returns, consider the impact of income tax changes and prepare for digital reporting.
For homeowners, the near-term picture remains steady. Most people will not be directly affected by the 2028 surcharge, and buying costs remain unchanged as we move toward 2026.
Mullucks will continue to support clients through each stage of these changes, helping you navigate a market that remains resilient and full of opportunity.
