UK Budget November 2025: How does it affect property?

The much anticipated 2025 Budget has been delivered by the Chancellor of the Exchequer, Rachel Reeves, and there are a mix of measures that affect the UK property market.

Our complete rundown of policies that affect the property market and buy-to-let investors in the 2025 Budget is:

• Are there changes to Stamp Duty on property?
• “Mansion Tax” on the most expensive properties
• Rise in property income tax rates
• Dividend tax rates increase
• Is 2026 a good time to invest in property?

Overall, the important fact is that property values and rents are rising faster than costs. Future forecasts show that this is likely to continue, and that profits from buy-to-let investment property will keep rising in the medium- and long-term.

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Are there changes to Stamp Duty on property?

There were no changes to Stamp Duty on property in the November 2025 Budget. The only changes to Stamp Duty were regarding new company listings on the London Stock Exchange.

Stamp Duty rates for property transactions will remain at the current levels.

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“Mansion Tax” on the most expensive homes

The Chancellor has announced that owners of the most expensive homes in the UK will have to pay a small additional surcharge on top of the existing Council Tax rates. Houses valued at more than £2m will now have to pay an additional £2,500 per year, rising to £7,500 per year for houses valued at more than £5m. This is in addition to existing council tax rates.

It is anticipated that this will affect approximately 100,000 homes and come into force from April 2028.

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Rise in property income tax rates

Also announced today was a slight increase to property income tax rates of 2%. That will make the rates for property income as follows:

• Basic rate – 22%
• Higher rate – 42%
• Additional rate – 47%

These rises are scheduled to come in from April 2027, giving landlords time to prepare and ensure that their portfolios are performing as strongly as possible before then. It also means rents will rise by much more than 2% before the tax changes come into force.

Even though tax is going up, landlords’ income will be protected due to rent rises and the overall profits landlords can earn from UK buy-to-let property is likely to continue increasing.

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Dividend tax rates to increase

The rate of tax on dividends is also set to increase slightly. As with the rise in property income taxes, there will be an additional 2% added to each band, as follows:

• Basic rate – 10.75%
• Higher rate – 35.75%

This rise will be applied from April 2026 and could affect investors who use a limited company to build their portfolios and pay themselves dividends. If you are unsure whether you will be affected, please make sure to speak to an independent tax advisor to ensure you fully understand the changes.

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Is 2026 a good time to invest in property?

Despite some small tax rises, 2026 is still a good time to invest in UK buy-to-let property. House prices and rents are rising faster than costs, meaning investor profits are rising in the short- and long-term.

Supply is low and demand keeps growing. Construction rates cannot keep up and investors can capitalise on that need for housing. Want to learn more and get bespoke investment advice ahead of the new year rush?

Contact our team of property experts today to discover our available opportunities.