--- title: "Landlord tax 2027: the 24%, 44% and 49% rates explained" description: "Rental profit is set to be taxed at 24%, 44% and 49% from 6 April 2027. What changed in the October 2026 Budget, worked examples, and what it costs you." url: https://housemaths.com/guides/landlord-tax-2027/ updated: 2026-11-05 publisher: House Maths (https://housemaths.com) editor: Daniil Shumko note: General information about UK property, not financial advice. Check the dated figures against the sources listed. --- Landlords # Landlord tax 2027: the 24%, 44% and 49% rates explained Rental profit is set to be taxed at 24%, 44% and 49% from 6 April 2027. What changed in the October 2026 Budget, worked examples, and what it costs you. - Edited by [Daniil Shumko](https://housemaths.com/about/#editor) - Updated 5 November 2026 - Figures checked 3 November 2026 [Calculator **Landlord tax 2027 calculator** What the new property income rates add to your bill from April 2027, with the mortgage interest credit.](https://housemaths.com/tools/landlord-tax-calculator/) ## In short - From **6 April 2027**, rental profit is set to be taxed at **24%, 44% and 49%** instead of the normal 20%, 40% and 45%. - The 28 October 2026 Budget added two points to the 22%, 42% and 47% rates announced in 2025. Those older figures are **out of date**. - The new rates still need to pass in **Finance Bill 2026-27**, so they're announced, not yet law. - The mortgage interest credit is due to rise from 20% to **24%** too. Staying in one band, the rise is about **4% of profit, minus 4% of interest**. - A higher-rate landlord with £12,000 profit and £6,000 interest pays **£240 a year more**. If you let out property in your own name, the tax on your rental profit is set to rise from April 2027. It’s the second increase announced in a year, and plenty of guides still quote the first. ## What changed in the October 2026 Budget In November 2025 the government said rental profit would get its own tax rates from April 2027: 22%, 42% and 47%, two points above the normal income tax rates. Finance Act 2026 wrote those rates into law. The Budget on 28 October 2026 went further. In the government’s words: “From 2027 to 2028, the property basic rate will be 24%, the property higher rate will be 44%, and the property additional rate will be 49%.” | Tax band | 2026-27 (now) | Announced Nov 2025 | Announced Oct 2026 | | --- | --- | --- | --- | | Basic | 20% | 22% | **24%** | | Higher | 40% | 42% | **44%** | | Additional | 45% | 47% | **49%** | HMRC’s policy paper says the change will be made in Finance Bill 2026-27. So the accurate way to describe the 24%, 44% and 49% rates today is “set to rise to”, not “have risen to”. ## When it starts, and who it affects The new rates apply from the 2027-28 tax year, which starts on **6 April 2027**. The 2026-27 tax year, running to 5 April 2027, uses the normal rates. They apply to individuals with rental income in England, Wales and Northern Ireland. The Scottish and Welsh governments have been given the power to set their own property income rates, so landlords there should watch the Welsh draft Budget on 17 November 2026 and the Scottish Budget on 3 December 2026. HMRC estimates that around 5% of taxpayers will see an average rise of £225 a year in 2027-28, and that 2.4 million landlords will be affected by 2031-32. ## What happens to the mortgage interest credit Since 2020, individual landlords can’t deduct mortgage interest from their rental profit. Instead, they get a tax credit worth the interest multiplied by the basic rate. From April 2027 that credit is due to be given at the **property basic rate**. With the October 2026 Budget, that means 24% instead of 20%. This partly offsets the rise for landlords with a mortgage: the more of your profit goes on interest, the smaller your rise. **Check the final wording.** The 24% credit rate follows from the property basic rate. We’ll confirm it against the Finance Bill text when it’s published. ## Worked examples Take a landlord with **£12,000 of rental profit before interest** and **£6,000 of mortgage interest** a year, whose rental profit sits entirely in one tax band. | Band | 2026-27 | 2027-28 | Rise | | --- | --- | --- | --- | | Basic | £1,200 | £1,440 | **£240** | | Higher | £3,600 | £3,840 | **£240** | | Additional | £4,200 | £4,440 | **£240** | For the higher-rate landlord, the working is £12,000 × 40% − £6,000 × 20% = **£3,600** this year, and £12,000 × 44% − £6,000 × 24% = **£3,840** from April 2027. The rise is the same at every band because both the rate on profit and the interest credit go up by four points. The quick rule: **the rise is 4% of your profit before interest, minus 4% of your interest.** With no mortgage at all, the same landlord would pay **£480** more. These sums ignore your personal allowance, other income that might push profit into a higher band, and the limits on the interest credit. They show the size of the change, not your actual tax bill. ## Work out your own number > **Interactive calculator.** Use it at https://housemaths.com/guides/landlord-tax-2027/. The figures below are its worked example with the default inputs. Extra tax a year from April 2027 **£240** That's £20 a month more, if the announced rates become law. | Working | 2026-27 | 2027-28 (announced) | | --- | --- | --- | | Tax on your rental profit | **£3,600** | **£3,840** | A simple illustration: it assumes all your rental profit sits in one band, ignores your personal allowance and other income, and doesn't apply the limits on the interest credit. England, Wales and Northern Ireland. Scotland sets its own rates. ## What the forecasters expect The Office for Budget Responsibility said the rises “represent a material reduction in returns to private landlords”, and that “landlords are likely to pass on more of these costs to renters in the long-run”. That’s a forecast, not a certainty, and rents depend on much more than tax. ## What to do before April 2027 - **Know your numbers.** Pull together a year of rent, running costs and mortgage interest, so you can see your own rise. - **Check your band.** Rental profit is added to your other income. A rise in rent or salary can push part of it into the next band. - **Diarise the dates.** The Welsh draft Budget on 17 November 2026, the Scottish Budget on 3 December 2026, the 31 January 2027 self assessment deadline, and 6 April 2027. - **Speak to an accountant before restructuring.** Moving property into a company, or selling, can trigger stamp duty and capital gains tax. It’s a decision that depends on your circumstances, and we don’t give advice on it. ## Common questions ### When do the new landlord tax rates start? From the 2027-28 tax year, which starts on 6 April 2027. Rent you receive in the 2026-27 tax year is still taxed at the normal rates of 20%, 40% and 45%. ### Are the 24%, 44% and 49% rates law yet? Not yet. The government announced them in the Budget on 28 October 2026, and they need to pass in Finance Bill 2026-27. Until then, Finance Act 2026 still holds the earlier 22%, 42% and 47% rates. ### Do the new rates apply to landlords who own through a limited company? No. The separate property rates are for individuals' rental income. Companies pay corporation tax on their profits. Whether a company suits you is a question for an accountant, because moving property into one can trigger stamp duty and capital gains tax. ### Do the new rates apply in Scotland and Wales? HMRC says the rates will apply to individuals in England, Wales and Northern Ireland, and that the Scottish and Welsh governments can set their own property income rates. The draft Welsh Budget is due on 17 November 2026 and the Scottish Budget on 3 December 2026. ## Sources Every figure above comes from these pages. We checked them on 3 November 2026. 1. [HMRC: Income Tax, changes to tax rates for property and savings income](https://www.gov.uk/government/publications/income-tax-changes-to-tax-rates-for-property-and-savings-income/income-tax-changes-to-tax-rates-for-property-and-savings-income) 2. [GOV.UK: Budget 2026](https://www.gov.uk/government/publications/budget-2026-document/budget-2026-html) 3. [GOV.UK: Budget 2026, Annex A rates and allowances](https://www.gov.uk/government/publications/budget-2026-overview-of-tax-legislation-and-rates-ootlar/annex-a-rates-and-allowances) 4. [HM Treasury: Changes to tax rates for property, savings and dividend income (November 2025)](https://www.gov.uk/government/publications/changes-to-tax-rates-for-property-savings-dividend-income/changes-to-tax-rates-for-property-savings-dividend-income) 5. [OBR: Economic and fiscal outlook, October 2026](https://www.gov.uk/government/publications/october-2026-economic-and-fiscal-outlook/economic-and-fiscal-outlook-october-2026) **General information, not advice.** This guide explains the rules as they stood on 3 November 2026. Your own position depends on your circumstances, so check with HMRC, a qualified accountant or a regulated adviser before you act. Spotted something out of date? Email [support@housemaths.com](mailto:support@housemaths.com) and we'll fix it.