Autumn 2025 Budget Update for Property Investors
Property investors: big changes are here and the Autumn Budget could impact you more than you think.
The Chancellor has unveiled the Autumn Budget, announcing major updates across taxes, pensions, household finances and public spending. At REALM 47, we’ve distilled the key changes that matter most to both UK based and international investors and, most importantly, what they mean for your portfolio.
Despite the headlines, our message is clear: property remains one of the strongest long term investment vehicles, and with strategic planning, this Budget can be used to your advantage.
Major Updates Just Announced
Income Tax
Income tax thresholds typically rise with inflation, but they have been frozen since 2022 and the freeze will continue for three more years from 2028. Basic rates of income tax, VAT and National Insurance will not increase. However, frozen thresholds increase the risk of ‘fiscal drag’, pushing many earners, including landlords, into higher tax brackets.
In addition, from April 2027, income tax on rental (property) income rises by 2 percentage points across all bands:
Basic rate: 22%
Higher rate: 42%
Additional rate: 47%
This will tighten cashflow for leveraged investors and lower yield properties. The result will be rental prices increasing where possible. More landlords selling personally held property and purchasing in tax efficient structures.
Property & Council Tax
There are two key changes:
Property, dividend and savings tax rates increase by 2%. This directly affects net rental profits and investment income.
A new Council Tax surcharge for high value homes (the so-called ‘mansion tax’) arrives in April 2028. It will be £2,500 per year for properties over £2 million and up to £7,500 per year for homes above £5 million.
This targets the ultra prime market. Most everyday investors operating in the mid market space remain unaffected. Stamp Duty thresholds remain unchanged to both resident and non resident SDLT.
Pensions
From 2029, salary sacrifice into pensions will be capped at £2,000 per year.
Any contributions above this will be taxed at standard employee pension contribution rates.
This particularly affects higher earners and directors using salary sacrifice led planning.
ISA Reform
From the 6th April 2026:
Cash ISA annual limit reduced from £20,000 to £12,000
Stocks & Shares ISA stays at £20,000
Over 65s will be exempt from these changes
This pushes more investors toward equity based ISA holdings over cash based ones.
Energy Bills
The government is scrapping the Conservative ECO scheme, which Reeves states cost families more than it helped. Households are expected to see around £150 off their energy bills next year.
The good news is that for landlords that include bills within rent, this will reduce your expenses. While not a direct investor reform for landlords that don’t include bills within the rent, reduced household pressure helps overall affordability and rental resilience.
Business Rates
From 2026:
Retail, hospitality and leisure properties with rateable value under £500,000 will see permanent reductions.
Larger commercial properties over £500,000 rateable value will face higher rates to balance the funding.
Commercial investors should consider modelling these changes into yield forecasts.
Capital Gains Tax
Capital Gains Tax relief for business owners selling shares will drop from 100% to 50%.
This is particularly significant for:
Investors who own property inside a company
Anyone planning to sell shares in a property holding SPV
Expect materially higher CGT bills on exits.
Impact on Landlords and Property Investors
Here is the combined effect of the above measures:
Higher Property Taxes - Rental profits will fall for many landlords as property income tax rises by 2%.
High Value Property Surcharge - Those owning properties over £2m will see annual charges between £2,500 and £7,500.
Frozen Tax Thresholds - More landlords could unintentionally slip into higher tax bands.
Rising Costs and Inflation - Maintenance costs are increasing and inflation continues to pressure running expenses.
Slower Price Growth - Prime property markets, in particular, may see softer upward movement.
Why REALM 47 Remains Positive and Why You Should Too
Despite the increases, the fundamentals remain resilient and in many ways, this Budget strengthens the case for strategic property investment. Here’s why:
Mid market rental property remains strong: Homes below the £2m threshold are unaffected by the surcharge and continue to see record rental demand.
Targeted tax measures = opportunity: Investors focusing on value, rental performance and sustainable long term growth are less exposed to the changes.
Market corrections may create buying windows: If prime property prices soften due to the new surcharge, investors with patient capital will be well positioned.
Flexibility remains your biggest competitive advantage: Those who can adapt their strategy, such as looking at restructuring portfolios, diversifying into mid market rentals, or repositioning high value assets, will outperform.
What We Recommend at REALM 47
We continue to advise investors to take a value + longevity approach:
Prioritise mid market rental properties - strong demand and unaffected by the surcharge.
Focus on long term cashflow, not speculative flipping.
Diversify your portfolio with a mix of rental stock, renovation projects and buy to hold assets.
Review your tax planning, especially with frozen thresholds and rising property income tax.
Model yield and ROI carefully before new acquisitions.
Property continues to offer that rare combination of real asset security, income capability and long term growth potential.
What Next? Expert Guidance is Coming Soon
Our expert advice is coming soon. Join our Investor ClubHouse and follow REALM 47 on social media so you don’t miss this important update. For now, review your rents, reassess your cashflow, speak with your accountant if you are holding property personally and start preparing for the upcoming changes.
Make the Budget Work for You
The changes are here, but so are the opportunities. Stay ahead, stay informed and make your portfolio work smarter.
Speak to our expert team at REALM 47 today and take control of your investment strategy.