Landlord Tax Increase 2027 and BTL Rates - Updated November 2026
- property income tax from 6 April 2027
- 24% / 44% / 49%property income tax from 6 April 2027
- on today's 20% / 40% / 45%
- +4ppon today's 20% / 40% / 45%
- BTL 5yr fix from (65% LTV, high fee)
- 4.59%BTL 5yr fix from (65% LTV, high fee)
- limited company landlords (corporation tax)
- Not affectedlimited company landlords (corporation tax)
The Budget on 28 October 2026 raised income tax on property income by a further 2 percentage points from 6 April 2027, to 24% (basic), 44% (higher) and 49% (additional). That is 4 points above today's rates once the Budget 2025 rise is included. Landlords who own through a limited company pay corporation tax instead and are not affected. Buy-to-let 5-year fixes start from 4.59% at 65% LTV with a high fee.
Property income tax rates for individual landlords
Swipe the table sideways to see every column.
| Band | 2026/27 (now) | From 6 April 2027 (Budget 2025 plan) | From 6 April 2027 (after Budget 2026) |
|---|---|---|---|
| Basic rate | 20% | 22% | 24% |
| Higher rate | 40% | 42% | 44% |
| Additional rate | 45% | 47% | 49% |
Buy-to-let rates, November 2026
Swipe the table sideways to see every column.
| Product | Indicative rate | Notes |
|---|---|---|
| BTL 5-year fix, personal name | from 4.59% | 65% LTV, high arrangement fee; compare the APRC |
| BTL 2-year fix, personal name | from 3.59% | High fee; APRC on the best 2-year is about 8.8% |
| Limited company BTL, 5-year fix | 5.50%–6.20% | Fewer lenders; personal guarantees required |
What the 2027 landlord tax rise changes
Who pays it
Individual landlords, including joint owners, on rental profit taxed as property income. GOV.UK says the new rates apply to individuals in England, Wales and Northern Ireland; the Scottish and Welsh governments can set their own property income rates.
Limited companies
Companies pay corporation tax on rental profit, not income tax, so the property income rates do not apply. Extracting profit as salary or dividends is taxed separately.
When it starts
6 April 2027, the start of the 2027/28 tax year. The 2026/27 tax year is unchanged.
Mortgage interest
Individual landlords still cannot deduct mortgage interest as an expense and instead receive a tax credit. Take advice on how the credit applies from 2027/28 before relying on any figure.
Making Tax Digital
Separately and already announced, Making Tax Digital for Income Tax applies to landlords with qualifying income over £50,000 from April 2026 and over £30,000 from April 2027.
Should you move to a limited company?
Transferring properties you already own into a company is a sale for tax purposes, so it can trigger capital gains tax and stamp duty, and needs a new mortgage. For new purchases, a company structure is often worth modelling, especially for higher-rate taxpayers.
This guide is general information, not tax advice. Speak to a tax adviser before changing how you own property.
Sources
Budget figures checked on 3 November 2026 against the HM Treasury and HMRC publications below. The change is to be legislated in Finance Bill 2026-27, so the final law may differ.
What the 2027 rise costs a landlord: worked example
- 2026/27 at 40%
- £8,000
- 2027/28 at 42% (Budget 2025 plan)
- £8,400
- 2027/28 at 44% (after Budget 2026)
- £8,800
- Extra tax a year against today
- £800
£20,000 of taxable rental profit for a higher-rate taxpayer, all taxed in the higher band.
Budget 2026 adds £400 a year on top of the Budget 2025 rise.
A basic-rate landlord with the same profit pays £800 a year more (20% to 24%). Simplified: ignores the mortgage interest credit and personal allowance. Not tax advice.
Deals last 13 days on average - lock in today, review before completion
The figures above are indicative and describe the best case. Send your own scenario and we will come back the same working day with terms from the lenders that actually fit it.
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Enough detail to price it is the amount, the security, the purpose and how you plan to repay. The rest we can fill in on a call.
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Rate context and outlook
Bank Rate is 3.75% (next decision Thu 5 Nov 2026). Most economists expect a rise to 4.00%: 54 of 63 in a Reuters poll on 15 October. Fixed rates are priced from swap rates rather than Bank Rate, so much of the expected move is already in fixed pricing: the best 2-year and 5-year fixes are now level at 4.78%, and the Moneyfacts averages are 5.97% (2-year) and 6.00% (5-year).
The average deal stays on sale for only 13 days (Moneyfacts), so a quoted rate can disappear quickly. If your deal ends in the next six months, securing a rate now and reviewing it before completion is the lower-risk approach. Trackers (best 2-year 3.99%) move with every Bank Rate change.
Reviewed by David Doulton, Director, Doulton Bridging Finance, over 20 years in property finance. Last reviewed 3 November 2026. Doulton Money Ltd t/a Doulton Bridging Finance, FCA No. 814533.
Frequently asked questions
How much is landlord tax going up in 2027?
Property income tax for individual landlords rises to 24%, 44% and 49% from 6 April 2027: 2 points from the Budget 2025 announcement and 2 more from the 28 October 2026 Budget.
Are limited company landlords affected?
Not by the property income rates. Companies pay corporation tax on rental profit. Tax on money you take out of the company is separate.
When does the property income tax increase start?
6 April 2027, the start of the 2027/28 tax year.
Does the increase apply in Scotland and Wales?
GOV.UK says the new rates apply to individuals in England, Wales and Northern Ireland, and that the Scottish and Welsh governments can set their own property income rates under their fiscal frameworks. Check the rates that apply where you are taxed.
What are buy-to-let mortgage rates in November 2026?
5-year fixes start from 4.59% at 65% LTV with a high fee, and 2-year fixes from 3.59%, again with a high fee. Compare the APRC, not just the rate.
Should I remortgage into a limited company?
Moving an existing property into a company is treated as a sale and can trigger CGT and stamp duty. It can still make sense in some cases; get tax advice and we can model the mortgage side.
Will higher tax change how lenders assess my BTL?
Rental cover tests already vary by tax band, often 125% for basic-rate and 145% for higher-rate taxpayers. Lenders set their own tests, so we check each lender's current criteria at application.
How much can I borrow?
Usually 4 to 4.5 times income, with some lenders going to 5 or 5.5 times for higher earners and certain professions, subject to affordability.
How long does a mortgage take?
A mortgage in principle takes minutes to a day; a full offer usually takes 2–4 weeks from application.
Is a lower rate with a high fee better than a no-fee deal?
It depends on the loan size. On smaller loans the no-fee deal often wins; we compare the total cost over the fixed period.
How early can I remortgage?
You can secure a new deal up to six months before your current one ends.
What documents will I need?
ID, proof of address, 3 months' payslips and bank statements, or 2 years' accounts or tax calculations if self-employed.
Where this applies
Most buy-to-let mortgages are not regulated by the FCA. Your property may be repossessed if you do not keep up repayments.
Model your buy-to-let after the 2027 tax rise
Independent whole-of-market advice · FCA No. 814533