The Autumn Budget is one of the UK government’s most significant financial events, delivered annually by the Chancellor of the Exchequer in the House of Commons.
Often presented in late October or November, this year’s Autumn Budget announced several changes to the UK’s welfare system, pensions and transport. Although the property sector was not a key focus of the Autumn Budget 2025, some slight changes have been announced, including the highly-anticipated Mansion Tax and changes to Property, Savings and Dividend Tax.
Read on as we break down these key changes, and how the Autumn Budget 2025 could affect UK property investors.
What is the new Mansion Tax?
The much-speculated ‘Mansion Tax’ is set to be introduced in the UK, placing a new charge on super high-value properties.
Under the newly announced plans, owners of individual properties worth more than £2 million will be subject to an annual tax, payable in addition to their existing council tax. Those affected are mostly based in the South of England, with 90% of the UK’s properties worth over £2 million located in or around Greater London.
Key points to note – Mansion Tax
- Set to be implemented in April 2028
- Will only apply to individual properties, not across the total value of a property portfolio
- Property value will be based on new valuations, set to be carried out by the Valuation Office to reflect the property’s 2026 value
- Properties will be sorted into different bands, and will have the following annual surcharge:
- £2.0 – 2.5 million: £2,500
- £2.5 – 3.5 million: £3,000
- £3.5 – 5 million: £5,000
- £5 million + £7,500
- 90% of UK properties worth over £2 million are located in or around London
What are the tax rises affecting UK property investors?
In this week’s Autumn Budget, The Chancellor unveiled a rise in tax on dividends, property and savings income by two percentage points.
The dividends tax rise is set to come into force in April 2026, with the property and savings tax to follow in April 2027. This will affect landlords holding UK property at a minimal level who receive regular income from tenants, with differing rates depending on whether the property is held by an individual, or a limited company.
See the new rates below.
Key points to note – Dividend Tax
- Dividend Tax is a tax paid on shares withdrawn from a company’s profits, e.g. rental yield.
- Applicable for UK property investors who hold their property within a limited company.
- Set to come into force in April 2026
- Basic rate: rising to from 8.75% to 10.75%
- Higher rate: rising to 33.75% to 35.75%.
Key points to note – Property and savings income
- Property income tax is a tax paid on your net rental yield, i.e. your profit.
- This tax is applicable to UK property investors whose property is held in their individual name.
- Set to come into force in April 2027
- Basic rate: rising from 20% to 22%
- Higher rate: rising to 40% to 42%
- Additional rate: rising to 45% to 47%
Key example of tax rises for property investors:
- For a UK property investor who owns a £400,000 property with a 5% net yield, that generates £20,000 rental income per year, their tax after the Autumn Budget 2025 has only risen by £33 a month.
What does this mean for UK property investors?
The Autumn Budget 2025 has mostly focused on other areas, not the property sector. The Mansion Tax won’t affect most UK property investors, as most individual UK property investments cost significantly less than £2 million to purchase.
The rise in property income tax will affect all UK property investors, however at 2%, it is a minimal change that could also be offset and added to the rental charge. Overall, the property market will not be hugely affected by the changes introduced.
The UK property market has a strong history of property value, and continues to offer a steady, reliable investment strategy. Over the next five years, the UK is expected to see further sales value growth of 22.2%, as the resilient demand for UK property is predicted to continue.
To find out more about investing in UK property, you can contact the Select Property team of property consultants. We have over 21 years experience in the industry, and can assist a global community of investors to secure UK property.