From 6 April 2027, rental profit taxed at the higher rate pays 44%. In the current tax year it pays 40%. That's the headline of Budget 2026 for landlords, and it sits next to a second date: on 31 March 2027 the 0% VAT rate on installing insulation and other energy-saving materials ends. Below are the changes from the 28 October Budget that touch a rental property's numbers, what didn't change, and a works plan for the five months in between. We build; we don't give tax advice. Anything personal is for your accountant.
The three changes that matter to a landlord's spreadsheet
| Change | Date | Source |
|---|---|---|
| Property income tax rates of 24%, 44% and 49% | From 6 April 2027 | Budget 2026, HMRC policy paper |
| VAT on installing energy-saving materials returns to 5% (0% until then); heat batteries added | From 1 April 2027 | Budget 2026, VAT Notice 708/6 |
| No penalty points for late submission of the first four quarterly Making Tax Digital updates in 2027-28, for people joining in April 2027 | 2027-28 tax year | Budget 2026 |
The Budget 2026 document also lists a landlord registration fee for the private rented sector database. Our piece on landlord deadlines before April 2027 covers the register timetable.
Budget 2026 for landlords: property income tax at 24%, 44% and 49%
Budget 2025 had already given property income its own rates from April 2027, two points above the standard ones. Budget 2026 adds a further two. HMRC's policy paper on the property and savings rates sets them out:
| Band | 2026-27 | From 6 April 2027 | Extra tax per £10,000 of profit in that band |
|---|---|---|---|
| Basic | 20% | 24% | £400 |
| Higher | 40% | 44% | £400 |
| Additional | 45% | 49% | £400 |
The paper says the change affects individuals and partnerships with rental income, and trustees and personal representatives receiving property income. It's an income tax measure, so companies aren't covered by it. For individuals the rates apply in England, Wales and Northern Ireland, and Scotland and Wales have been given the ability to set their own property rates. HMRC expects 2.4 million landlords to be affected by 2031-32.
What it means for your portfolio depends on how you hold it, how your finance costs are relieved and which band your profit falls in. That's a conversation for your accountant. Our part is the other side of the spreadsheet: what the works cost and when they land.
VAT on energy-saving materials: the 0% window closes on 31 March 2027
VAT Notice 708/6 zero-rates the installation of qualifying energy-saving materials in residential accommodation from 1 May 2023 to 31 March 2027. From 1 April 2027 it reverts to 5%. The Budget confirmed that happens as planned, and adds heat batteries to the list at the 5% rate.
What qualifies, per the notice:
- insulation to walls, floors, ceilings, roofs and lofts, and to tanks and pipes
- draught stripping
- controls for central heating and hot water
- solar panels, heat pumps and batteries for storing electricity
Replacement windows and doors aren't on the list. Materials bought supply-only are standard-rated, and other building work on the same project is usually standard-rated too.
The arithmetic: on £10,000 of qualifying installation, 5% VAT is £500. Across four rental properties, that's £2,000 for the same work done a few weeks later. Ask us whether your project qualifies before we price it.
What did not change: stamp duty, building regs and the EPC direction
Stamp duty. No change to stamp duty land tax rates or thresholds was announced. The SDLT measures were technical: a group relief fix from 29 October 2026, and removing SDLT on rent paid under assured tenancies from 1 May 2026.
Council tax on expensive homes. The High Value Council Tax Surcharge in England goes ahead from April 2028, with a deferral scheme, reductions and exemptions confirmed.
Building regulations. The government says it "will not make major changes to building regulations for the remainder of this Parliament", except to keep improving building safety, including the Grenfell Inquiry recommendations. For a developer that's useful certainty on specification.
EPC and MEES. The Budget doesn't change the direction set in January: private rented homes to reach EPC C by 1 October 2030, with a £10,000 cost cap per property. That's confirmed policy direction, not yet law. Reformed EPCs are expected in the second half of 2027; our new EPC delay piece explains what that means, and EPC C by 2030 for Bristol landlords has typical measures.
Planning. MHCLG's PlanAssist AI tool is to be available to all councils in England by the end of 2027, subject to testing.
Loans, grants and the Boiler Upgrade Scheme
- Boiler Upgrade Scheme kept at £400 million in 2027-28, rising broadly with inflation after that.
- Warm Homes Loan Scheme. The GOV.UK factsheet (27 October) describes no- and low-interest loans from ten initial lenders: up to £20,000 for an air or water source heat pump, £15,000 for solar panels and £15,000 for a battery. A loan can be combined with a Boiler Upgrade Scheme grant of up to £9,000. Installs go through MCS-certified installers. The factsheet is written for households and homeowners, so check with the lender whether a let property qualifies.
- £100 Household Energy Payment from January 2027 for council tax bands A to D in England. The government's energy bills note says it goes to households liable for council tax who live in the property, so in most lets your tenant receives it, not you.
A works plan for the next five months
| When | What to do |
|---|---|
| November | Pull the current EPC and recommendations for every unit. Walk-round survey. We price each property line by line. |
| December to February | Fabric measures: loft top-ups, underfloor insulation, internal wall insulation room by room. Voids first; occupied units by arrangement with tenants. |
| By mid-March | Qualifying installs complete and invoiced before 1 April. Heat pumps and solar through MCS-certified installers. |
| April | New tax year. Re-run yields at the new rates with your accountant. |
Where a unit is turning over, fold the energy works into the void. Our refurb-to-let guide shows how. On retrofit we act as main contractor: grant-funded heat pumps and solar go in through accredited installers, and we run the programme around them. Our energy audit and retrofit service sets out the route, and there's more on our energy work and developer and portfolio services.
We're SafeContractor approved (certificate OC4217) and TrustMark registered (licence 4264445).
Frequently asked questions
What are the new property income tax rates from April 2027?
From 6 April 2027, property income is taxed at 24% basic, 44% higher and 49% additional rate for individuals in England, Wales and Northern Ireland. Budget 2025 set rates two points above the standard ones; Budget 2026 added a further two.
Does the property income tax rise apply to limited companies?
No. It's an income tax measure covering individuals, partnerships, trustees and personal representatives with property income. Companies pay corporation tax instead. Whether your structure still suits your portfolio is a question for your accountant.
When does 0% VAT on insulation end?
On 31 March 2027. Installing qualifying energy-saving materials in residential property is zero-rated until then and 5% from 1 April 2027. Supply-only materials are standard-rated, and windows and doors aren't on the qualifying list.
Did Budget 2026 change stamp duty?
No change to stamp duty rates or thresholds was announced. The only SDLT measures were technical: a group relief change and removing SDLT on rent under assured tenancies from 1 May 2026.
Can landlords use the Warm Homes Loan Scheme?
Possibly, but check with the lender first. The GOV.UK factsheet describes loans for households and homeowners, up to £20,000 for a heat pump, £15,000 for solar and £15,000 for a battery, installed by MCS-certified installers.
Send us the spec or the property list. We'll price it. Start here and we'll call you back within one working day.
