The 2025 Budget has landed, and for the property market, the message is one of stability with gradual change. There are no sudden shocks for buyers, sellers or landlords, but several announcements set the stage for adjustments over the coming years. Understanding these updates now can help homeowners and investors plan effectively for the future.
CJ Hole has analysed the Budget 2025 to provide a clear overview of what it means for the UK property sector.
High-value homes and the 2028 surcharge
One of the most talked-about changes is the introduction of a High Value Council Tax Surcharge, sometimes called a mansion tax. From April 2028, properties in England valued at £2 million or more, according to 2026 VOA valuations, will face an additional annual charge between £2,500 and £7,500.
Around 100,000 homes are expected to be affected, almost all in London and the South East. For the vast majority of homeowners, this has no immediate impact, but it is something to consider for long-term financial planning.
Stamp duty and property taxes remain the same
The Budget confirmed that Stamp Duty Land Tax rates and thresholds remain unchanged. There are also no new taxes for homes valued over £500,000.
This clarity ensures that buying, selling, and moving costs remain predictable and stable as we approach 2026.
Rental income tax to increase in 2027
Landlords should note that from April 2027, rental income tax rates in England, Wales and Northern Ireland will rise by two percentage points across all bands.
The basic rate will increase to 22 percent, the higher rate to 42 percent and the additional rate to 47 percent. Scotland is unaffected because it sets its own tax system. While this change is a few years away, landlords may wish to consider how it will affect long-term cash flow.
Long-term support for commercial and mixed-use landlords
From April 2026, reduced business rate multipliers for retail, hospitality and leisure properties in England with rateable values below £500,000 will become permanent. This replaces the temporary RHL relief and provides certainty for commercial landlords and those with mixed-use portfolios.
Why property remains resilient
Even with some tax increases on the horizon, property continues to offer long-term security. Rental demand is strong in many regions, yields remain competitive, and property provides both consistent income and potential for long-term capital growth.
During periods of economic uncertainty, physical assets such as property often outperform financial markets in terms of stability, making it a reliable choice for investors who plan.
Regional impact of the changes
The new £2 million surcharge will mainly affect London and the South East. In most other regions, property values remain below this threshold, meaning the impact will be minimal.
Coupled with unchanged Stamp Duty rules, this supports a steady property market across the UK outside the highest-value areas.
Other legislative changes to watch
While the Budget sets a longer-term fiscal framework, two pieces of legislation will influence property sooner.
The Renters’ Rights Act is expected to progress through 2025 and 2026. This legislation will reshape key responsibilities for landlords and tenants. CJ Hole will provide guidance as the details emerge. Read our full guide to the Renters’ Rights Act.
Making Tax Digital begins in April 2026. Landlords and self-employed property owners will need to keep digital records and submit returns using MTD-compliant software. Planning will make this transition smoother.
Looking ahead
The 2025 Budget provides stability while highlighting gradual changes. Homeowners, landlords and investors can take comfort in predictable moving costs, but should plan for the longer-term effects of rental income tax increases and the £2 million surcharge.
By understanding these changes early, property owners can make informed decisions, adjust investment strategies and continue to benefit from a resilient UK property market. CJ Hole remains committed to helping clients navigate these developments with insight and clarity.
