November 2026 Budget and what it could mean for landlords

It’s that time of year again when every other question I get is, “what do you think is going to happen in the budget?”

Formidable though I believe my talents are, I am afraid I do not have a crystal ball and from years of experience, I can honestly say that trying to guess what’s going to happen on budget day is a mugs game.

That does not mean we should just wait and see. It pays to know what the current position is and look at the likelihood of any changes. When it comes to property tax a clear and easy way to follow this is by looking at the major taxes that currently affect property and then follow up with an update the day after the budget to track any changes and their impact. 

When it comes to property then, here are the main taxes that you need to be aware of: –

When you Buy

Stamp Duty 

The current rates of stamp duty for UK residents in England are as follows: –

Prediction: 

I really hope that there will be no further increases in SDLT as it has become one of the most complex taxes for landlords and one that is stopping a lot of transactions that may otherwise have gone ahead. There have been some rumours of a complete overhaul of SDLT with a more graduated way to pay the tax. i.e. instead of paying all of the SDLT up front, you pay it in annual instalments over say 5 years with the full balance becoming due if you sell before the full period has passed. Other commentators have speculated that a more gradual rate of SDLT would be helpful. So instead of a cliff edge where the rate jumps enormously if you go £1 over a rate band, having a more graduated rate for a smoother less brutal increase.

When you receive rental income

• Income Tax – If ownership is in personal names
• Corporation Tax – If ownership is through a limited company

Other taxes are: –

• • Tax on dividends: Payable when you extract profits from a limited company
  • ATED (Annual Tax on Enveloped Dwellings) for landlords with property valued at over £500k in a limited company
  • VAT – Payable by landlords who have furnished holiday lets or let property on platforms such as Airbnb
  • Making Tax Digital – This is not a tax but is a huge change coming in in April 2026. Landlords with gross rental income of more than £50,000 will be mandated into reporting their income and expenses quarterly from April 2026. It does not apply to limited companies. 

Personal tax rates are currently as follows: –

Corporation tax rates are: –

Dividends

ATED

VAT

Prediction:

At the time of writing the air is thick with rumours that there will be an increase in the basic income tax rate. Any increase will also therefore apply to profits made by landlords.

There have also been rumours of national insurance being charged to landlord profits. This would be a major step and is one that has been rumoured before. I recall shortly after the famous Ramsey v HMRC case where the court of appeal judged Elizabeth Ramsey to be operating a business and was therefore eligible to claim S162 Incorporation relief in transferring her properties to a limited company. This was followed by some overzealous HMRC officers issuing NIC demands to some of our landlord clients completely without any changes to legislation or government approval on the basis that rental income was now no different to trading income. When we then pointed out to them that if they were going to treat the profits of landlords in the same way as sole traders, would they allow for any rental losses to be offset against other taxable income in the same way? At which point the NIC demands were removed and nothing was heard of again. 

As of this morning, the airwaves are once more thick with speculation that the Chancellor may well impose NI charges on landlord profits. This will undoubtedly be a further blow to landlords who own property in their personal names and increase the use of limited companies as the way to invest in property. 

On corporation tax, there has been no indication of any changes in the offing. Given the NI increases last year and the dire economic growth rates since, I think even this Chancellor is not looking to make any changes here. There is still however the possibility that she may impose a restriction on tax relief on interest to the basic rate of corporation tax of 19%, for residential property investment activity, in much the same way as was done by the last Conservative government in restricting mortgage interest relief to the basic rate for private landlords. 

As to ATED and dividends, I do not expect any changes.

VAT is one tax that might be looked at. Rumours have been afloat that the chancellor may drop the VAT threshold to £50,000 in an attempt to level the playing field for small businesses. It has been said that many self-employed people simply stop trading if their turnover reaches £90,000 to avoid having to register for VAT. By dropping the VAT registration threshold to £50,000 this would force a large number of small traders into the same position as larger businesses and take away the advantage of not having to charge VAT.

When you sell property

• Capital Gains Tax – when you sell a property held in your personal name
• Corporation Tax – when you sell a property held in a limited company

Capital Gains Tax

18% and 24%

Prediction

Much to my surprise, and that of many other commentators, CGT was left completely untouched at the last budget except for changes to the rates under Business Asset Disposal Relief (BADR).

The expectation was that CGT rates on the sale of second properties would be brought into line with income tax rates of 20%, 40% and 45%. 

This time round I would not be surprised if there was an alignment of the rates of CGT on the sale of rental property. There have also been rumours of an annual wealth tax applying to properties over a certain value. We could well see something of this sort being brought in together with a tax on the sale of some private residences too.

When you pass away

Inheritance tax – payable on the estate of a deceased person

The nil rate band of £325,000 has not changed since 2009. The tax rate payable above this is 40%. If you are leaving a main residence a further £175,000 nil rate allowance is available. A single person can therefore leave up to £500,000 and married couple £1m. IHT falls away if you make a gift as follows: –

Prediction:

I think one thing is for certain as far as I am aware. There will be no reduction in IHT.  

As to whether there will be any increases that is definitely something that would not come as a surprise. Some means of taxing landlords an additional amount would not be out of the question so I will be watching the budget, as I always do, intently. 

Conclusion

Finally, as with all budgets the devil is in the detail. Headline announcements in Parliament are often unravelled when the full details are published in the detailed Budget Report. I will be poring through this intensely and will publish a post budget update on all of the taxes mentioned above, setting out the changes and how these may impact you.

See you again on 27th November for a full update on the above, or as soon as I can thereafter.

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