Landbay comments on Chancellor's decision to increase tax on property income by a further 2%

28 October 2026

Rob Stanton, Sales and Distribution Director at Landbay, said:

“Having already announced a 2% increase in income tax on property income in last year's Budget, the Government has now doubled that increase to 4%, which will take the basic rate to 24%, the higher rate to 44% and the additional rate to 49% from April 2027.

“This applies to landlords who hold their rental properties in their personal names across England, Wales and Northern Ireland, rather than those who own through limited companies, and clearly represents a significant additional tax burden at a time when landlords are already managing higher mortgage costs, growing regulatory responsibilities and the expense of maintaining their properties. This is unlikely to encourage further investment in the private rental sector, particularly among landlords already questioning whether individual properties remain financially viable.

“Our latest landlord survey - issued just this morning - showed that almost 80% of landlords were concerned about further tax changes ahead of the Budget, and today's announcement suggests those concerns were well founded. The consequences of this decision are unlikely to be felt by landlords alone, because when the costs of providing rental housing increase, there is a real likelihood that some of those costs will eventually be passed on to tenants through higher rents.

“Equally concerning is the potential impact on rental housing supply, with further taxation likely to make some landlords reconsider purchasing additional properties, while others may decide to sell existing investments. At a time when we need to encourage investment and ensure there are sufficient rental homes to meet demand, measures which risk reducing supply could ultimately make life even more difficult for tenants, particularly if fewer available properties place additional upward pressure on rents.”