Autumn Budget 2026: What the New Landlord Tax Changes Mean for Buy-to-Let Investors

Landlords face a further increase in tax on rental income from April 2027, putting renewed pressure on buy-to-let profits. The Autumn Budget has confirmed an additional 2 percentage point increase in property income tax rates, on top of the increase already planned.

For landlords, this makes it increasingly important to understand how much profit their property generates after expenses and tax, while ensuring their rental property remains competitive in the local market.

At Comfort Estates, we look at what the changes mean, how they could affect rental returns and the practical steps landlords can take to manage their investment.

Chancellor John Healey announced a further increase in income tax rates on property income, with the new rates due to apply from April 2027.

The changes mean the tax rates for individual landlords in England, Wales and Northern Ireland will be:

The Office for Budget Responsibility estimates that the property income tax increase will raise £455 million by the 2031/32 tax year.

The changes apply to property income rather than representing a general increase in income tax rates on employment earnings. Different rules apply to landlords operating through limited companies, so the impact will vary depending on how a property investment is owned.

Even if your rent stays the same, a higher tax bill could reduce the amount of money you retain from your investment.

Consider this illustrative example of a personally owned buy-to-let property:

• Annual rental income: £18,000
• Allowable expenses: £3,000
• Mortgage interest: £9,000
• Cash profit before tax: £6,000

Using the assumptions in the supplied illustration, the retained profit changes as follows:

On these assumptions, the landlord retains £240 less each year under the 44% scenario than under the current 40% scenario.

Important: This is an illustrative calculation based on the supplied figures and assumptions, not a universal forecast of a landlord's tax bill.

1. Review your rental income

Rental prices should reflect current market conditions, the property's condition and the level of demand in the area.

If your rent has not been reviewed for some time, it may be worth checking how it compares with similar properties.

Any rent increase should follow the correct legal process and take account of the tenancy agreement.

2. Reduce unnecessary maintenance costs

Preventative maintenance can help identify smaller issues before they develop into more expensive problems.

3. Minimise void periods between tenancies

When a property is empty, rental income stops while some costs continue.

Preparing for the end of a tenancy, arranging necessary maintenance promptly and marketing the property at the right time can help minimise unnecessary gaps between tenants.

4. Understand your overall investment costs

Rent is only one part of a property's financial performance. Landlords should also account for insurance, repairs, management fees, compliance requirements, mortgage costs and tax.

If you own several properties, reviewing each one individually may also highlight where costs could be reduced or where a property needs a different strategy.

With tax changes putting more focus on profitability, effective property management matters.

At Comfort Estates, we can help landlords by:

• Reviewing rental values: Checking whether your rent remains competitive and reflects current market conditions.
• Prioritising preventative maintenance: Helping you address issues early to reduce unexpected costs and protect your property.
• Minimising tenancy gaps: Helping reduce unnecessary void periods so your rental income is less likely to be interrupted.
• Supporting a smoother tenancy process: Helping you manage the practical demands of letting a property, from finding suitable tenants to coordinating ongoing property needs.

Every property and landlord is different, which is why understanding your goals and the performance of your investment is an important starting point.

If you are a landlord in Nottingham, Comfort Estates can help you review your rental property's position in the market and manage the practical demands of letting.

Get in touch with our team to discuss your property management needs and how we can help you keep your investment competitive.

This article provides general information and is not financial or tax advice. Tax rules and individual circumstances vary. For advice on your own tax position, consult a qualified tax adviser.