Britain Is Raising Tax in Three Instalments. Landlords and Savers Are Next.

One Budget, Three Start Dates

Most tax rises arrive in one lump and get argued about for a fortnight. The Autumn Budget of November 2025 did something more careful: it raised tax on three kinds of unearned income, and gave each one a different start date.

Dividends went first, in April 2026. Property and savings income follow in April 2027. The surcharge on £2 million homes lands in April 2028. Three years, three headlines, none of them large enough on its own to dominate a news cycle.

You can call that political management or you can call it a reasonable transition. Either way, if you're a landlord, the practical consequence is the same: the rise that affects you is the one nobody is talking about yet, and you have about eight months before it starts.

Step one already happened. We covered it when it did — see the two-point dividend rise for what that cost directors. This is step two.

§ 01April 2027: Property Income at 22, 42 and 47

From April 2027, rental profit stops being taxed at the ordinary main rates and gets its own schedule. The structure of the bands is unchanged — what changes is the rate applied within each one:

Note what this isn't. It's not a new charge, not a new allowance restriction, and not another version of the Section 24 mortgage-interest change that reshaped the sector from 2017. It's the same tax computation you already do, with a different number at the end. Which makes it unusually easy to model and unusually hard to plan around.

It applies UK-wide, including Scotland — property income rates are reserved rather than devolved, so Scottish landlords get this on top of the Scottish main rates that already apply to their employment income.

§ 02Savings Income Gets the Same Two Points

Savings interest moves to 22% / 42% / 47% on the same day, in the same shape.

Three things soften it, and they matter more than the headline:

• The Personal Savings Allowance survives. £1,000 of interest tax-free for basic-rate taxpayers, £500 for higher-rate, nil for additional-rate. Below the allowance, the rate change is irrelevant.
• ISAs are untouched by this measure. Interest inside an ISA is not taxable income, so it can't be taxed at 22%. Every pound of cash you move inside the wrapper before April 2027 is a pound this rise can't reach.
• The starting rate for savings still exists for people with low non-savings income.

So the population actually hit is narrower than "savers": it's people holding meaningful cash outside an ISA, generally because they've used the allowance up or never got round to moving it. With interest rates well above where they sat for most of the 2010s, that group is considerably larger than it used to be. A higher-rate taxpayer with £60,000 in a 4% account earns £2,400 of interest, £1,900 of it taxable — the extra two points costs £38 a year. Real, but not the story. The story is the £2,400 itself, which five years ago would have been £300.

§ 03What It Actually Costs a Landlord

Rough figures, on rental profit after allowable expenses and the finance-cost credit — not gross rent:

The arithmetic is flat because the rise is flat: two pence on every pound of profit, wherever it sits. A single-property landlord clearing £8,000 pays about £160 more a year. Somebody running six flats on £60,000 of profit pays £1,200.

Whether that changes behaviour is the interesting question, and I'd say mostly not on its own. £160 doesn't sell a flat. But it doesn't arrive on its own — it lands on a sector that has already absorbed the Section 24 interest restriction, higher SDLT on additional dwellings, five years of rate rises on the mortgage side, and the compliance load coming with Making Tax Digital for landlords above the income threshold. Marginal cases have been leaving for a while. This nudges a few more.

What it does do reliably is sharpen the incorporation question. A limited company pays corporation tax on rental profit, not property income tax, and gets full relief on mortgage interest. That comparison just moved two points in the company's favour — while the extraction cost moved against it, because taking the money out as dividends got more expensive in April 2026. The two changes partly cancel. Anyone told incorporation is now obviously right should ask to see both halves of that calculation.

§ 04The Freeze Underneath Everything

Here's the measure that raises the most money and generates the least noise. Income tax thresholds, already frozen, were extended a further three years — they now stay put until April 2031. Inheritance tax thresholds are frozen on the same timetable.

The personal allowance has been £12,570 since April 2021. By 2031 it will have been £12,570 for a decade. Had it tracked inflation from 2021, it would be somewhere north of £16,000 by now.

That's fiscal drag, and it's a genuinely bigger deal for most households than any rate change in this Budget. Every pay rise pushes a slightly larger share of your income above a fixed line. Nobody announces it, nobody votes on it annually, and it compounds silently for ten years.

The dividend, property and savings rises are all visible: a number changed, you can see it. The freeze is invisible and does more. If you want to know what a decade of frozen thresholds does to your own take-home, run your salary through the UK calculator and then run it again with the salary you expect in five years.

§ 05April 2028 and the Valuation Happening Now

The third instalment is the High Value Council Tax Surcharge, and it deserves attention this year rather than in 2028, for a reason that's easy to miss.

From April 2028 it applies to residential properties in England worth £2 million or more, as a flat annual charge on top of council tax:

The detail that matters: the Valuation Office is running a targeted valuation exercise during 2026, and it is the 2026 valuation that sets the charge in 2028. So the number being written down this year is the number you'll be arguing about in two years' time — and the band edges are hard cliffs. A house valued at £2,010,000 pays £2,500 a year; one valued at £1,990,000 pays nothing. That's a £2,500 annual difference turning on a 1% valuation judgement.

If your home is anywhere near £2m, or near £2.5m, or near £3.5m, the thing worth doing in 2026 is knowing what value has been attached to it and understanding the challenge route — not waiting until the first bill arrives.

§ 06What to Do With the Next Eight Months

April 2027 is roughly eight months away. A few things are genuinely worth doing before then, and a few things aren't.

Worth doing:

• Move cash into an ISA. The single cleanest response. Interest inside the wrapper can't be taxed at 22%, and this year's allowance is use-it-or-lose-it.
• Check whether your savings interest actually exceeds the PSA. A surprising number of people worry about a rise that doesn't touch them.
• Bring deductible repairs forward where the work is needed anyway. A repair deducted against 2026-27 profit saves tax at 40%; the same repair a year later saves at 42%. That is an argument for not deferring, which is the opposite of the usual instinct — and it's a weak argument for doing work you didn't need.
• Revisit incorporation properly if you hold several properties, with the higher dividend cost included, and with the CGT and SDLT charges on transferring property into a company priced in. Those transaction costs sink most single-property cases immediately.
• Find out what the VOA thinks your house is worth if it's near a surcharge band edge.

Not worth doing: selling a rental purely to avoid two percentage points on future profit. CGT on disposal — 18% or 24%, both unchanged — will usually dwarf several years of the rate rise. And restructuring ownership on the strength of a rise that hasn't started, in a Parliament with two more Budgets before it does, is planning against a moving target.

One honest caveat on all of the above: April 2027 is two fiscal events away. Announced measures have been amended and occasionally abandoned before their start date. The rates here are announced policy, not yet lived experience. Plan for them, but don't make an irreversible decision on the assumption that they'll arrive in exactly this shape.

§ 07Key Takeaways

Property income moves to 22% / 42% / 47% from April 2027 — two points on every pound of rental profit, UK-wide.

Savings income moves by the same two points on the same date. The PSA, the starting rate for savings, and ISAs are all unaffected.

Main CGT rates were left alone at 18% and 24%. BADR was the separate casualty, rising to 18% in April 2026.

The threshold freeze to April 2031 raises more than any of it and gets discussed the least.

The mansion tax starts in 2028 but is being measured in 2026. Band edges are cliffs — a 1% valuation difference is worth £2,500 a year.

Eight months is enough time to use an ISA allowance and get a valuation. It isn't enough time to justify selling a property.

Sources: HM Treasury, Autumn Budget 2025 (26 November 2025); House of Commons Library briefing CBP-10450, Budget 2025: income tax rates on income from property, savings and dividends; House of Commons Library briefing CBP-10934, High Value Council Tax Surcharge and homes over £2 million; ICAEW, Budget: Taxes on property, savings and dividends increased; Deloitte Taxscape Autumn Budget 2025 analysis. Rates for April 2027 and April 2028 are announced policy and remain subject to change in future fiscal events. This is general information, not tax advice.