November 2026 Budget and what it means for landlords

November 2026 Budget and what it means for landlords

In short, landlords have once again had further tax increases levied on them.

Here are the 2 main tax increases:-

If you own your rental property in your personal name a new tax rate of 22%, 42% and 47% will apply from April 2027.

If you own your investment property through a limited company corporation tax has not changed, but, if you pay yourself dividends the tax rate has increased by 2%. This comes into effect from April 2026. So depending on your other income the new dividend rates are 10.75%, 35.75%  and 39.35% respectively.

A real slight of hand here. By increasing the dividend rate, dividends paid by ALL limited companies has increased by 2%, not just landlords. My initial calculations now show that if you are self employed, you are now better off being a sole trader not a limited company.

Budget Report

The devil is always in the detail so here is the extract from the Budget report states the following:-

2.36 Increases to the tax paid on income from assets will raise £2.2 billion in 2029-30 in a fair and progressive way. The government is:

• Creating separate tax rates for property income. From April 2027, the property basic rate will be 22%, the property higher rate will be 42%, and the property additional rate will be 47%.
• Increasing the ordinary and upper rates of tax on dividend income by 2 percentage points from April 2026. There is no change to the dividend additional rate.
• Increasing the tax rate on savings income by 2 percentage points across all bands from April 2027

So what does this mean for UK property investors?

Any increase in costs is likely to eventually find it’s way into higher rents for a number of reasons. On balance, it may tip more landlords into selling up or not expanding and hence a smaller pool of available property to let. Less supply can only mean more pressure on demand which means price increases.

The impetus to purchase through a limited company will increase even further with more than half of new BTL purchases already being done through limited companies. The ability to not withdraw profits means the corporation tax rate of 19% on profits up to £50,000 compared with a minimum of 22% in your personal name makes the attraction of limited companies even more stark.

The upside? No other taxes were increased so no change to CGT, SDLT, VAT or IHT.

Thandi Nicholls Ltd
Creative Industries Centre
Glaisher Drive
Wolverhampton
West Midlands
WV10 9TG