The 2025 Budget sets out a stable and predictable environment for homeowners and landlords, while signalling some key changes that will shape the property market over the next few years. For those looking to buy, sell or let, it offers clarity and helps guide practical decision-making.
Below, Parkers explains the key announcements in a practical, easy-to-follow way, highlighting what they mean for you and your property decisions.
1. A future surcharge for high-value homes
The headline decision affects a very specific part of the market: properties valued above £2 million.
From April 2028, homes in this price bracket will be subject to a new High Value Council Tax Surcharge, based on updated VOA valuations due in 2026. The annual charge will fall between £2,500 and £7,500.
Most properties in Parkers’ core areas sit well below this threshold, so the impact locally is limited. For buyers and sellers working towards 2026 or 2027, this change has no immediate bearing.
2. Stamp duty and £500k+ ownership costs remain unchanged
Despite rumours of widespread property tax adjustments, Stamp Duty Land Tax remains unchanged. There are no new charges for homes above £500,000, apart from the separate and much narrower high-value surcharge starting in 2028.
For anyone planning to move in 2025–2026, this means no surprise changes to upfront costs.
3. Rental income taxes rising from 2027
From April 2027, landlords in England, Wales and Northern Ireland will see a 2-percentage-point increase across all income tax bands on rental income:
- Basic rate → 22%
- Higher rate → 42%
- Additional rate → 47%
Scotland is excluded due to its devolved tax system.
These changes don’t affect day-to-day lettings management, but they do matter for long-term yield planning and decisions around refinancing, portfolio balance or future acquisitions.
4. Continued support for commercial landlords
From April 2026, smaller retail, hospitality and leisure premises in England (rateable value under £500,000) will benefit from permanently reduced business rate multipliers.
This gives commercial landlords and mixed-use owners greater certainty after years of short-term relief extensions.
5. Why property remains a long-term strength
Parkers continues to see strong fundamentals in the property market, even with tax changes on the horizon:
- Tenant demand remains elevated in many towns
- Rental stock is limited in several local areas
- Yields remain competitive in high-demand pockets
- Property provides both long-term capital growth and a consistent income stream
For many investors, bricks and mortar remain one of the most reassuring places to hold wealth through economic shifts.
6. Regional considerations: Impact remains concentrated
Homes above £2 million are clustered predominantly in London and the South East. Across the regions Parkers covers, the surcharge is unlikely to affect the majority of households.
With stamp duty unchanged, market stability continues for typical buyers and sellers.
7. Beyond the Budget: Key legislation to watch
Two forthcoming changes sit outside the Budget but will have a major influence on landlords:
The Renters’ Rights Act (2025–2026)
A major update to tenancy law is underway and will change how tenancies are set up, managed and concluded. Parkers will provide guidance as the details emerge. Explore our complete guide to the Renters’ Rights Act.
Making Tax Digital (April 2026)
Many landlords will need to move to digital record-keeping and online submissions for property income. Preparing early will make the transition smoother.
8. What this means for your next steps
The Budget signals a gradual evolution rather than a sudden disruption:
- Buyers and movers face no changes to stamp duty heading into 2026
- Homeowners below the £2 million bracket will see no direct impact
- Landlords should begin planning for the 2027 rental income tax rise
- Commercial landlords gain long-term certainty with permanent multipliers
- Digital reporting for landlords arrives sooner, in 2026
Parkers offers clear, grounded guidance to help you plan, protect returns and make informed decisions in a market that remains resilient.
