The 2025 Budget offered a steady outlook for the property market, with most major taxes left unchanged and the key updates scheduled for future years. This means homeowners, buyers and landlords can expect stability in the near term, without sudden shifts to moving or letting costs.
Newton Fallowell explains the updates, how they may influence the market over time and what they mean for your property plans.
High value surcharge coming in 2028
One of the main announcements is the introduction of a High Value Council Tax Surcharge. From April 2028, properties in England that are valued at £2 million or more under the 2026 VOA valuations will face an additional yearly charge of between £2,500 and £7,500.
Around 100,000 homes are expected to be affected, almost entirely in London and the South East. For current buyers and sellers, this measure has no immediate impact due to the long lead-in time and very high value threshold.
No new taxes for homes over £500,000
Despite early speculation, the Budget did not introduce any new property charges for homes valued above £500,000. The only confirmed future levy is the surcharge for £2 million plus properties starting in 2028.
This decision maintains a sense of continuity for buyers and sellers, making plans for 2025 and 2026.
Stamp duty remains unchanged
Stamp Duty Land Tax was left completely untouched. All current rates, thresholds and rules continue as they are.
This stability ensures that the usual costs of moving home remain predictable.
Rental income tax rising in April 2027
Landlords will see changes to rental income taxation from April 2027 in England, Wales and Northern Ireland. Each income tax band will rise by two percentage points.
- Basic rate becomes 22 percent
- The higher rate becomes 42 percent
- The additional rate becomes 47 percent
Scotland is unaffected because it sets its own income tax structure. Though still a few years away, landlords may wish to consider long-term planning as part of their portfolio strategy.
Commercial property relief made permanent
For landlords with retail, hospitality or leisure properties in England, reduced business rate multipliers for units with a rateable value below £500,000 will become permanent from April 2026.
This replaces the temporary RHL relief and provides clearer certainty for commercial and mixed-use investors.
Why the market remains strong
Despite future tax adjustments, the fundamentals of the property market remain positive. Rental demand continues to exceed supply in many regions, helping support strong occupancy and healthy yields. Property also remains a stable, tangible investment that often performs well during broader economic uncertainty.
Alongside the potential for long-term capital growth, these factors keep property an attractive choice for investors seeking reliability.
Minimal impact across most regions
Because the new surcharge applies only to homes above £2 million, most areas of the UK will see little to no direct impact. London and the South East contain the majority of properties at this level.
With stamp duty unchanged and no new taxes for the majority of homes, regional markets should remain steady through 2026.
Other changes to prepare for
Beyond the Budget, two major reforms will influence the way landlords operate.
The Renters’ Rights Act is expected to progress through 2025 and 2026. This will bring significant changes to tenancy law. Newton Fallowell will continue to guide landlords as the final details are confirmed. Read our guide to the Renters’ Rights Act.
Making Tax Digital will apply from April 2026. Many landlords and self-employed property owners will need to keep digital tax records and submit returns.
Key takeaways
The most important points from the 2025 Budget are clear.
- Stamp Duty stays the same
- There are no new taxes for homes above £500,000
- A council tax surcharge for homes over £2 million begins in April 2028
- Rental income tax rises from April 2027
- Permanent business rate relief for some commercial properties begins in 2026
With demand for rental homes remaining strong and long-term fundamentals holding firm, landlords and homeowners remain in a positive position. Newton Fallowell will continue to provide clear, practical guidance to help you navigate these changes with confidence.
