If you let property or hold savings outside an ISA, the Autumn Budget on 28 October 2026 matters more to you than most. Tax on property and savings income is going up for the second Budget in a row, and Making Tax Digital is about to reach many more landlords. Here’s what has changed and what you can do about it.
Property and savings income: a 4 point rise from April 2027
Last year’s Budget announced that property and savings income would be taxed 2 percentage points higher than other income from April 2027. This Budget doubles that. From 6 April 2027 the rates will be:
- Basic rate: 24% (currently 20%)
- Higher rate: 44% (currently 40%)
- Additional rate: 49% (currently 45%)
Employment and self-employment income stay at 20%, 40% and 45%. The new property rates apply to landlords taxed in England, Wales and Northern Ireland – if you are a Scottish taxpayer, speak to us about how the changes apply to you.
What it costs landlords
These examples ignore mortgage interest and assume the rental profit falls entirely within one tax band.
- A basic rate landlord with £15,000 of rental profit pays £3,000 today and £3,600 from April 2027 – an extra £600 a year.
- A higher rate landlord with £20,000 of rental profit pays £8,000 today and £8,800 from April 2027 – an extra £800 a year.
Relief for mortgage interest is given as a tax credit rather than a deduction, so it’s important to model your own position. We’ll confirm the detail once the Finance Bill is published.
Making Tax Digital is coming for smaller landlords
Making Tax Digital for Income Tax already applies to landlords and sole traders with combined gross income over £50,000. From April 2027 the threshold falls to £30,000, and from April 2028 to £20,000. Remember the test uses gross rents and takings, not profit.
The Budget brought two small reliefs. Taxpayers joining MTD in April 2027 will not get late-submission penalty points for quarterly updates in the 2027/28 tax year, and the roll-out for some taxpayer groups has been deferred until further notice.
If your 2025/26 gross property and self-employment income is over £30,000, you need to be ready by April 2027. That means digital records, MTD-compatible software and quarterly updates to HMRC.
Should you move your properties into a company?
Higher personal rates make the company route look more attractive: companies pay Corporation Tax at 19% to 25%. But incorporation is rarely simple. Transferring existing properties can trigger Capital Gains Tax and Stamp Duty Land Tax, mortgages may need refinancing, and taking money out of a company carries its own tax. It can work well for landlords building a portfolio for the long term – but it needs modelling on your numbers first.
Savers: make your allowances work harder
The Personal Savings Allowance stays at £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Above that, interest will be taxed at 24%, 44% or 49% from April 2027. Additional rate taxpayers get no allowance at all.
The good news is that the cash ISA limit stays at £20,000, so savers can still shelter the full annual allowance in cash. Practical steps to consider:
- Use your ISA allowance every year – and your spouse’s or civil partner’s too
- Consider holding savings in the name of the lower-earning partner
- Review whether pension contributions could bring your income into a lower band
- Check fixed-term bonds: interest is usually taxed when it is paid, so maturity dates can matter
Other changes for property owners
- From April 2028 a council tax surcharge applies to homes valued at £2 million or more, as announced in the 2025 Budget.
- From April 2029 a new First Time Buyer ISA replaces the Lifetime ISA for new savers.
- The trading and property allowances help very small earners; the trading allowance rises to £3,000 from April 2027.
How My Web Accountants can help
We prepare landlord tax returns, set landlords up on Making Tax Digital software and file quarterly updates on their behalf. See our Self Assessment service, read our overview of the Budget’s personal tax changes, or book a free consultation.
*Based on the Budget announcements of 28 October 2026 and correct at the date of publication. Measures may change as they are legislated. This is general information, not advice.*