Budget 2026: The Key Changes That Will Impact Landlords

How will John Healey’s first Budget affect landlords and the wider lettings sector?

Chancellor John Healey promised his 2026 Budget would “give families and businesses breathing space” amid the cost-of-living crunch.

So did he deliver the goods? Let’s take a look.

Key takeaways

Headline-grabbing measures included scrapping standing charges on household gas bills, cutting tariffs on some foods and giving self-employed fathers two weeks of parental pay.

Property tax income

Landlord groups had called on the government to reconsider Rachel Reeves’ property tax income increase (announced last year and scheduled to start in April 2027).

Disappointingly, Healey ignored these appeals and instead announced an additional 2% rise from April 2027. (So much for breathing space.)

The move will raise property income tax to 24% (basic rate), 44% (higher rate), and 49% for those paying the additional rate.

Many economists have suggested the move could prove counterproductive, ultimately leading to higher rents and putting even more financial pressure on private landlords.

NRLA chief executive Ben Beadle said: “The Chancellor has today made life harder for renters right across the country.

“As the Office for Budget Responsibility has confirmed, hiking taxes will drive up rents and drive down supply in the rental market when demand is already way ahead of the number of homes available.”

Tax on banks

After making bumper profits in the first half of 2026, the banks were firmly in the Chancellor’s sights.

Healey added an extra 3% to the bank surcharge (taking it up to 6%). This will start in January and is time-limited for 15 months.

This measure shouldn’t impact landlords in the short term. However, those on buy-to-let mortgages may worry that, over time, it could trickle down to lending costs.

What didn’t change

Capital Gains Tax (CGT)

Every year, rumours abound that CGT will be reformed, either by aligning residential CGT rates with standard income tax rates or by amending the rules on CGT at death.

But these two elements of CGT remain untouched.

Stamp Duty

Everyone has an opinion on this widely unpopular tax, but for now, it will continue as is.

Overall verdict

While fears about changes to CGT did not come to fruition, landlords will be disappointed to be targeted again through changes to property income tax.

Facing what amounts to a 4% surcharge on property income tax, while absorbing the costs of doing business in the Renters’ Rights era, will be disheartening for many in the sector.

Now, more than ever, landlords need efficient systems in place to minimise void periods and to ensure they claim for all allowable expenses.

Thanks for reading.