"Targeting landlords won’t lose the government many votes, but such moves invariably end up hurting tenants"
- Tom Bill - Knight Frank
With the Chancellor set to deliver the Autumn Budget on 26 November, speculation is mounting over a series of tax proposals that could directly affect landlords and the property sector. While nothing has been confirmed, multiple reports indicate the government is considering measures targeting rental income, property wealth, and housing transactions.
Key areas under scrutiny
National Insurance on rental income
Rumours suggest that landlords’ rental profits, currently exempt from National Insurance contributions (NICs), could become liable, raising an estimated £2–3 billion annually. The move could mirror existing employee/self‑employed rates and would increase tax burdens for landlords, potentially reducing net rental yields by up to 10% in some cases. The policy aim is to ensure that property income contributes to government revenues while balancing broader fiscal needs.
On this, Tom Bill, head of residential research at Knight Frank, recently said, "Targeting landlords won’t lose the government many votes, but such moves invariably end up hurting tenants. With landlords already selling ahead of the Renter’s Rights Bill and tougher green regulations, another disincentive would reduce supply further and put upward pressure on rents."
"Those landlords that stay may pass on the extra costs in other ways. Governments need to fully grasp that when you tax an activity, you get less of it."
Stamp duty reform and national property taxes
Reports indicate the government is examining reforms to Stamp Duty Land Tax (SDLT), potentially replacing the buyer‑paid tax with a national property levy on sellers, initially for properties over £500,000. Alternative proposals include annual property‑based levies to supplement SDLT or council tax. These measures could alter the cost structure for property transactions, influencing the timing of purchases or sales, and impacting both landlords and the wider housing market.
Capital Gains Tax and property wealth tax reforms
Speculation points to tightening CGT reliefs, particularly for higher‑value properties or portfolios, which could increase the tax burden on landlords and second‑home owners when selling properties. In parallel, discussions are ongoing about a property wealth tax or higher council tax bands for expensive homes. Such reforms could influence investment strategies, holding periods, and portfolio decisions for landlords, as well as pricing and mobility in the high-end market.
Mansion tax
Speculation is mounting over the introduction of a so‑called “mansion tax,” potentially targeting homes valued at £2 million or more. Reports suggest an annual levy of around 1 % on the value above that threshold, with the majority of affected properties located in London and the South East. Industry voices have warned that such a tax could distort the high‑end property market, reducing mobility and influencing pricing near the threshold. At this stage, no formal policy announcement has been made, and the measure remains under consideration by HM Treasury.
Council tax overhaul and high‑value home levies
The government is also reportedly considering new top bands for council tax or a revised local property tax based on valuations or sale prices. For landlords owning high‑value residential properties, these measures could affect net yields and investment returns, and may also impact rental supply and demand dynamics in the upper tiers of the market.
Industry reaction
The National Residential Landlords Association (NRLA) has cautioned that additional tax burdens on landlords could reduce rental supply and increase costs for tenants. Meanwhile, data from Zoopla indicates early signs of cooling in the high-end market, with demand for homes priced over £500,000 falling by approximately 4% amid uncertainty about tax changes.
“The property market is in dire need of stability," says Matthew Thompson, head of sales at estate agency Chestertons. "What buyers and sellers really need is consistency rather than short-term headlines. Speculations over the Budget announcements have left very little hope for positive news; however, we would like the Chancellor to consider a potential stamp duty reform or relief, meaningful support for first-time buyers and incentives that encourage downsizers to move."
"The top end of the property market, which a lot of homes in London fall into, is being held back by high transaction taxes, so any further taxation will not help restore confidence amongst buyers or sellers. Lastly, whilst the government has been focused on discouraging buy-to-let investment, we would like to see measures that encourage responsible landlords back into the market to help increase the number of rental properties.”
Nigel Bishop of buying agency Recoco Property Search said, “There is little to no hope of the government announcing any positive news this Budget, which is already hindering house hunters from making major financial decisions, let alone finalising their search."
"There’s a certain irony to the current market sentiment as it is a strong buyer’s market, but the majority of house hunters simply don’t want to take advantage of this as the economic climate has killed buyer confidence and, with that, the property market."
"The key to regaining confidence is to minimise stamp duty implications. To get the property market moving again, we would also like the Chancellor to really think about how changes to Inheritance Tax or Capital Gains Tax, for example, could have an incredibly negative long-term impact. To avoid punishing homeowners, we hope for the Budget to include other, more balanced solutions that tackle the UK’s hole in public finances.”
If implemented, these changes could have wide-ranging implications for landlords’ investment strategies, rental pricing, and the structure of the private rented sector.
While speculation and media rumours can dominate the weeks leading up to the Budget, they are not always helpful. Uncertainty can cause landlords and investors to delay decisions, distort the market, and create anxiety for tenants.
However, on 26 November, when the Chancellor finally delivers the official Budget, the speculation will end, and for some, the reality of confirmed measures may be even more significant than the rumours suggested.
