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Following the Chancellor’s Budget announcement, property investors across the UK are evaluating what the new measures mean for their portfolios. The latest Budget introduces significant changes to taxation, high-value property levies, and long-term fiscal planning.
At Elborn Property Group (EPG), we’ve analysed the key points announced and outlined what they are likely to mean for investors, developers, and landlords moving forward.
1. Tax Increases on Rental, Savings, and Property Income
The Budget introduces multiple rises that affect investors:
Higher taxes on rental income (from April 2027)
The basic, higher, and additional rates for property income will rise by 2%.
This means:
- 22% (basic)
- 42% (higher)
- 47% (additional)
Investor impact:
Net rental yields will reduce unless rents rise, operating costs fall, or assets are repositioned for greater value-add.
Dividend and savings income tax rises
Dividend tax increases by two percentage points (from April 2026).
Interest and savings income tax will also rise.
Investor impact:
This increases taxation on SPVs, corporate structures, and diversified income streams.
2. The New High-Value Property Levy (“Mansion Tax”)
A new annual surcharge on properties valued over £2 million will begin in April 2028.
Investor impact:
High-end residential stock will carry higher holding costs. Developers and investors may need to revise pricing strategies or reposition assets to maintain market demand.
3. Frozen Tax Thresholds Until 2031
Income tax thresholds remain frozen until 2030/31.
As wages increase, more individuals will drift into higher tax brackets (fiscal drag).
Investor impact:
Investors receiving rental income or additional investment income may experience an increased tax burden over time, impacting net profitability.
4. Shifting Landscape for Buy-to-Let
Combined tax pressures may dampen enthusiasm for traditional buy-to-let models.
Investor impact:
- Lower net yields
- Reduced appetite for leveraged BTL
- Increased strategic shift toward alternative or diversified property investments
This aligns with a broader market movement away from small, individual investments toward more robust, scalable opportunities.
5. Macroeconomic Context and Government Direction
The Budget focuses on reducing public borrowing and managing public sector finances, while maintaining commitments to long-term capital investment, particularly infrastructure, housing, and regeneration.
Investor impact:
While tax burdens rise, infrastructure-led growth could support demand for urban developments and mixed-use regeneration schemes, creating opportunities for strategic investors.
This Budget doesn’t close the door on property investment, it simply requires investors to think smarter, structure better, and prioritise long-term value.
If you would like a personalised review of how today’s Budget affects your portfolio or upcoming opportunities, our team is here to help.
Contact us for a portfolio review
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