In the 2025 Autumn Budget, the Chancellor announced that, from April 2028, homes valued at over £2 million will be subject to a new annual council tax surcharge, popularly referred to in the Press as the “mansion tax”. The Budget also confirmed increases to taxes on property income and other investment income from April 2026.
At the same time, income tax thresholds are to remain frozen until 2030–31, quietly pulling more owners and landlords into higher tax bands.
Stamp Duty Land Tax (SDLT) itself was left unchanged in this Budget. However, earlier 2025 reforms, including the reduction of the standard nil-rate band back to £125,000 and the continuation of higher surcharges on additional properties, continue to shape the cost of buying.
Whether you own your home, rent out one or more properties, or are hoping to buy, it is essential to understand what this means before making your next move.
Clifton Ingram’s expert residential conveyancing lawyers can guide you closely throughout the process, using their comprehensive knowledge to ensure you make the best choices despite the effects of the 2025 Autumn Budget.
Contact our expert residential conveyancing lawyers today
Don’t let the Autumn Budget stop you from pursuing your next move. Get in touch with our fantastic team of conveyancing lawyers in Farnham, Reading and Wokingham today by calling us on 0118 978 0099 or using the contact form at the bottom of the page for a speedy, personable response.
Stamp Duty Land Tax: the cost of buying and selling
Stamp Duty Land Tax (SDLT) is one of the highest up-front costs when buying a property, so even relatively small changes can quickly alter affordability.
What has changed
This year’s Autumn Budget did not introduce new SDLT rates or thresholds. However, it confirmed that the SDLT regime, which was tightened earlier in 2025, will remain in place while the government works on longer-term property tax reform.
That means:
- The higher 5% SDLT surcharge on additional properties, such as second homes and buy-to-lets, continues to apply alongside the standard residential bands.
- The temporary higher SDLT thresholds for home movers and first-time buyers ended on 31 March 2025. In most cases, the nil-rate band has returned to £125,000, meaning more buyers will pay SDLT than in recent years.
Any wider move towards replacing SDLT with an annual property tax has been deferred.
What this could mean in practice
For homeowners and movers, the end of temporary SDLT reliefs and the continuation of the surcharge on additional properties mean timing is still important. Moving into a higher price band, even by a small amount, can significantly increase the upfront tax bill, which in turn affects deposit planning and mortgage affordability.
First-time buyers may find that the reduced nil-rate band and unchanged reliefs mean they reach the SDLT threshold sooner than expected, especially in higher-value areas.
For landlords and second-home owners, higher rates or surcharges on additional properties may make new acquisitions less attractive, prompting a shift toward remortgaging, improving existing stock, or reconsidering how properties are held. When rules change mid-transaction, the timing of completion can also become critical.
Rental income: impacts for landlords
For landlords, the way rental income is taxed is central to whether a property remains a viable long-term investment.
Budget changes affecting rental income
The Autumn Budget confirmed that from April 2026 the income tax rates applied to property income, dividends and savings will increase by two percentage points. For many landlords, this means paying more tax on rental profits even though rent levels and mortgage costs may already be under pressure.
At the same time, the freeze on income tax thresholds until 2030–31 means more landlords are likely to be pulled into higher or additional rate bands over time, increasing the effective tax burden on their rental income.
Profitability and strategy
As the overall tax burden on rental income increases, net yields may fall once borrowing costs, repairs and compliance expenses are factored in. Some properties, or even entire portfolios, may transition from being comfortably profitable to operating on the edge of positive cash flow.
In such circumstances, landlords often review whether to retain, sell, or rebalance their holdings, and whether their current ownership structure remains appropriate.
Even with higher rates, there may still be opportunities to remortgage, expand, or restructure, provided the rules remain relatively straightforward. However, any such decisions need to be made with a complete understanding of the tax and legal implications, which is where our lawyers can help.
For example, a landlord with £10,000 of taxable rental profit in a year could pay around £200 more in tax from April 2026 solely due to the 2% rise in the property income rate - a cost that quickly scales across a larger portfolio.
Capital Gains Tax and second homes
Capital Gains Tax (CGT) is particularly relevant when you sell or gift a second home or investment property, or when interests are transferred between family members or co-owners.
Changes to CGT on residential property
The Autumn Budget did not introduce new CGT rate rises on residential property. Instead, it confirmed that the existing regime remains in effect. For most individuals, gains on residential property are taxed at 18% within the basic rate band and 24% once you move into the higher-rate band, with an annual CGT exemption currently set at just £3,000.
These lower allowances and higher effective rates, introduced over recent Budgets, mean that a greater share of any gain on a second home or buy-to-let property is now exposed to CGT than was the case just a few years ago.
Timing, structure and family arrangements
Whenever CGT rules move, the timing and structure of transactions become more sensitive. A change in rates or allowances can alter the cost of selling a second home, and it can also affect transfers of equity, such as buying out a former partner, adding a new co-owner or adjusting shares within a family.
For instance, a higher-rate taxpayer selling a second home with a £100,000 taxable gain could face a CGT bill of around £24,000 under current residential property rates. Planning for that liability early can make the difference between a sale that comfortably clears the mortgage and associated costs, and one that leaves a much thinner margin than expected.
More pressure points and a greater risk of disputes
Whenever rules change or costs rise, existing tensions within the property market tend to surface.
Joint owners may disagree about whether to sell or hold, how mortgage payments and maintenance should be shared, or how a buy-out ought to be structured. These issues are prevalent during relationship breakdowns or when one owner’s finances come under pressure.
Landlord and tenant relationships can also become strained, so understanding the correct procedures and statutory protections on both sides is essential.
As owners look to manage higher taxes and maximise the value of their assets, there may also be an uptick in neighbour and boundary disputes related to extensions, redevelopments, or subdivisions of plots.
Issues over boundaries, access, rights of way, light and privacy commonly arise where owners seek to maximise the value of their land. Our Dispute Resolution team can advise on protecting your position and, where needed, on pursuing or defending claims.
How Clifton Ingram’s expert conveyancing lawyers can help
Accredited by the Law Society’s Conveyancing Quality Scheme (CQS) for our dedication to excellent client care, our property team is dedicated to putting your best interests at the heart of everything we do.
Our Residential Property and Dispute Resolution teams provide clear, practical guidance on:
- Residential conveyancing
- Landlord and tenant issues
- Jointly owned property disputes
- Transfers of equity
- Leasehold enfranchisement
- Lease extensions
- Boundary and neighbour disputes
Our Wills and Probate team can also provide advice on personal taxation issues, including income tax, Capital Gains Tax, and Inheritance Tax.
If you would like to discuss how the Autumn Budget could affect your property plans, get in touch with our fantastic team of conveyancing lawyers in Farnham, Reading and Wokingham today. Call us on 0118 978 0099 or use the contact form at the bottom of the page for a speedy, personable response.