The Government has announced its latest Autumn Budget, and there are several changes that homeowners, prospective buyers and landlords should be aware of.
Delivered by Chancellor John Healey on 28 October 2026, the Budget includes changes to property income tax, new support for first-time buyers and additional charges for owners of higher-value properties.
But what do these announcements actually mean for the property market, and how could they affect those looking to buy, sell or rent a property?
We've picked out some of the key property-related announcements and what you need to know.
1. Landlords face another increase in tax on rental income
One of the biggest announcements for landlords is a further increase in the tax rates applied to rental income.
The Government has confirmed that, from 6 April 2027, income tax rates on property income will increase by a further two percentage points, following an increase previously announced in the 2025 Budget.
The new rates will be:
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Basic rate: Increasing from 20% to 24%.
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Higher rate: Increasing from 40% to 44%.
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Additional rate: Increasing from 45% to 49%.
This applies to individual landlords and partnerships receiving rental income in England, Wales and Northern Ireland.
For landlords, this means a greater proportion of their rental profits could go towards tax, potentially affecting the overall return on their investment.
It is also worth remembering that landlords cannot simply deduct all mortgage interest from their rental income before calculating their taxable profits. Mortgage interest relief for individual landlords is restricted to a basic-rate tax credit.
The changes may lead some landlords to review their finances, reconsider their investment plans or look at whether their current rental income remains sustainable.
There are also questions about what this could mean for tenants. If landlords face increased running costs, some may consider whether rent adjustments are necessary. Others may reconsider remaining in the rental market altogether, potentially affecting the availability of rental properties.
2. New support for first-time buyers
There is some positive news for those hoping to get onto the property ladder.
The Government has confirmed a new £4.7 billion Your First Home scheme, which is expected to launch in Spring 2027.
The scheme aims to make buying a new-build property more accessible by offering eligible first-time buyers a Government equity loan of up to 20% of the purchase price.
Key details include:
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Buyers will need a deposit of at least 2.5%.
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The Government will provide an equity loan of up to 20%.
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The loan will be interest-free for the first five years.
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Household income limits will apply.
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The scheme will be available for eligible new-build properties.
The scheme is designed to help buyers who may be struggling to save a larger deposit, although it will only apply to qualifying new-build homes.
For first-time buyers considering purchasing a property, this could provide another route towards homeownership. However, buyers will still need to consider mortgage affordability and the longer-term costs and repayment arrangements associated with an equity loan.
3. Changes to Lifetime ISAs and a new First-Time Buyer ISA
The Budget has also introduced changes to savings options for first-time buyers.
From 29 October 2026, the withdrawal charge for Lifetime ISA holders buying a qualifying first home above the existing £450,000 property price limit will reduce from 25% to 20%, where the purchase meets the relevant conditions.
Looking further ahead, a new First-Time Buyer ISA is planned for April 2029.
This will allow eligible savers to contribute up to £4,000 each year, with a 25% Government bonus. The maximum Government bonus will be £20,000.
Existing Lifetime ISA holders will still be able to continue using their accounts under the current rules.
These changes are intended to give first-time buyers more flexibility and support when saving towards a deposit.
4. Additional council tax charge for higher-value properties
Another announcement concerns owners of higher-value residential properties.
The Government has confirmed plans for a High Value Council Tax Surcharge, sometimes referred to as a mansion tax.
From April 2028, owners of residential properties in England valued at £2 million or more will face an additional annual charge.
The proposed charges are:
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Properties valued between £2 million and £2.5 million: £2,500 per year.
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Properties valued between £2.5 million and £3.5 million: £3,500 per year.
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Properties valued between £3.5 million and £5 million: £5,000 per year.
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Properties valued at £5 million or more: £7,500 per year.
Importantly, the charge will be the responsibility of the property owner rather than the occupier and will be payable alongside existing council tax.
Properties will be assessed using April 2026 valuations, with draft valuation bands expected in autumn 2027 and the first bills due in March 2028.
Although this measure is unlikely to affect the majority of homeowners on the Isle of Wight, it is another change worth being aware of for those with higher-value property investments.
5. More funding for affordable housing
The Government has also announced an additional £1.5 billion for its Social and Affordable Homes Programme.
This funding is expected to support the delivery of around 10,000 additional affordable homes across England, with a particular focus on social rent and council housing.
The aim is to increase the availability of affordable housing and support people who may otherwise struggle to access suitable accommodation.
Increasing the supply of affordable homes is an important part of addressing the wider housing shortage, although the impact of this investment will depend on how quickly the homes can be delivered.
6. What does the Budget mean for the wider property market?
While the Budget includes several measures aimed at supporting buyers, it also introduces further financial considerations for landlords.
For the sales market, the new Your First Home scheme and changes to savings incentives could help some first-time buyers take their first steps towards homeownership.
However, the Budget did not introduce any major Stamp Duty Land Tax cuts or reforms, meaning buyers and sellers will continue to face the existing costs associated with moving home.
For landlords, the further increase in property income tax could prompt a review of investment decisions, particularly for those already managing rising mortgage, maintenance and compliance costs.
There is also the potential for changes in the rental market if more landlords decide to sell their properties. Any reduction in the supply of available rental homes could place additional pressure on tenants looking for accommodation.
The longer-term effects of these announcements will take time to become clear, and the impact will vary depending on individual circumstances and local market conditions.
What should homeowners and landlords do next?
Whether you're considering selling, buying your first home or currently renting out a property, it's important to understand how these changes could affect your plans.
For landlords in particular, the upcoming tax changes are a good reason to review your rental figures and speak to an accountant or financial adviser about your individual circumstances.
At Red Squirrel Property Shop, we're here to help with your property plans, whether that's finding your next home, selling your current property or discussing your rental options.
If you have questions about the local property market or would like to discuss your next move, our team would be happy to help.
Get in touch with Red Squirrel Property Shop:
📞 Sales: 01983 521212
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🌐 www.redsquirrelpropertyshop.co.uk
Please note: This article provides a general overview of the property-related announcements in the Autumn Budget 2026. It is not financial or tax advice. Individual circumstances will vary, and landlords should seek professional advice regarding their own tax position.
