Increase property income tax rates by 2pp (November 2025 Autumn Budget)

[MaxGhenis]

Summary

The November 2025 Autumn Budget increases property income tax rates by 2 percentage points from April 2027.

Policy Details

From the OBR Economic and Fiscal Outlook November 2025:

• Effective date: April 2027
• Basic rate: Increases to 22% (from 20%)
• Higher rate: Increases to 42% (from 40%)
• Additional rate: Increases to 47% (from 45%)
• Revenue: Estimated to yield £0.5 billion a year on average from 2028-29

Behavioral Effects Noted by OBR

• Small negative impact from pass-through of tax to rents and property tax receipts
• Offset by reduction in house prices reducing other receipts
• Long-term property market impacts discussed in paragraph 3.79 of OBR report

Implementation Required

Add new property income tax rate parameters or update calculation:

• Basic property rate: 20% → 22% (from April 2027)
• Higher property rate: 40% → 42% (from April 2027)
• Additional property rate: 45% → 47% (from April 2027)

Note: This may require creating new parameters if property income is currently taxed at the same rates as employment income. The change creates a differential between property/savings income and other income.

Source

OBR Economic and Fiscal Outlook November 2025, Chapter 3 (Policy measures), paragraph 3.33, Table 3.5

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[policyengine]

This policy has been fully implemented in the baseline. Property income tax rates increase by 2pp (to 22%/42%/47%) from April 2027.