Budget 2025: Key Concerns for Property Investors & Landlords

Date: November 14, 2025

Potential National Insurance on rental income, CGT and AEA changes, Stamp Duty reform and adjustments to corporate tax reliefs are widely expected in the 2025 Budget, with several of these measures likely to have a meaningful impact on landlords and property developers.

This article highlights what we know so far, in terms of confirmations and informed commentary, ahead of the Budget on 26 November. You may also wish to read our broader Budget analysis here: Autumn Budget 2025 Tax Rises

Rental Income Could Become Liable for National Insurance

Growing reports from sector bodies and recent Treasury discussions have led many to believe that rental income may be brought within the scope of National Insurance. This stems from the government’s ongoing review of tax fairness between employment, self-employment and investment-based income, with property income frequently referenced in public commentary.

At present, rental profits are liable for Income Tax but not NI. While no formal proposal has been published, several industry sources suggest that the government is exploring whether property income should contribute in a similar way to earned income. This has contributed to concerns among landlords, particularly those with leveraged portfolios or rising operational costs.

What are the expected or rumoured changes to rental income taxation in Budget 2025?

Reports from property and financial commentators indicate that HM Treasury may consider extending Class 4 National Insurance to landlords who hold property personally. The rationale often cited is harmonising tax treatment across different income streams. Until official policy is announced, the scope, thresholds and timing remain uncertain.

How could National Insurance apply to landlords?

If NI were applied in line with self-employed rules, it could introduce an additional percentage charge on taxable rental profits for those who hold property personally. The extent of any liability would depend on the rate of NI charged.

What are the other options to increase tax on landlords?

Reports are now suggesting that it is more likely that the government will break its election pledge and raise income tax ,whilst possibly reducing National Insurance. The result of this would mean that landlords will automatically face higher taxes on their profits.

What would this mean for smaller landlords and tenants?

Industry concerns focus on the impact on net yields, particularly for landlords already adjusting to higher borrowing costs, compliance obligations and maintenance expenses. Smaller landlords could experience reduced profitability, which may contribute indirectly to market pressures affecting tenants.

Learn more about how we support individuals with their tax position through our personal tax services.

Concerns Over Capital Gains Tax and the Annual Exemption Allowance in Budget 2025

Many analysts believe CGT will feature prominently in the Autumn Budget due to recent reductions in the Annual Exemption Allowance (AEA) and ongoing government interest in simplifying the tax landscape. For landlords and property developers, this could have a significant impact when disposing of residential property.

The AEA currently stands at £3,000 following consecutive reductions. Industry commentary suggests that further changes could be considered, although nothing has been formally announced. There is also continued reference to earlier recommendations for aligning CGT rates more closely with Income Tax, which would increase effective rates for some taxpayers.

We offer further guidance through our Capital Gains Tax and inheritance tax services.

Stamp Duty Land Tax, SDLT Reform

The possibility of SDLT reform has gained traction following government hints about simplifying or replacing transaction based property taxes.

Speculation includes adjustments to surcharges, changes to rate bands or broader structural reform. Some commentary also raises the concept of an annual property tax as an alternative, although no formal proposals have been published.

If you have specific questions around SDLT speak to our Property Tax specialists.

Making Tax Digital, MTD for Landlords from April 2026

From April 2026, landlords with qualifying income will be required to move to quarterly submissions under Making Tax Digital for Income Tax Self Assessment. This change is confirmed and will affect those whose combined trading and property income exceeds HMRC thresholds.

Landlords and developers with multiple properties or complex portfolios may experience a notable shift in administrative obligations, making preparation important.

You can read more through our dedicated guide on Making Tax Digital.

Other Potential Tax Changes Affecting Landlords and Property Investors in Budget 2025

A number of wider measures have been discussed in recent commentary that may affect landlords and property investors. These points remain unconfirmed but are important to be aware of ahead of the Budget 2025.

Tighter HMRC compliance and enforcement on undeclared rental income

Reports indicate a continued HMRC focus on identifying undeclared rental income, supported by expanded data matching tools.

Business rates reform

Commentary suggests a potential review of business rates where property use overlaps with commercial activity, including furnished holiday lets or mixed use premises.

Income Tax rise being considered for Budget 2025

While no policy has been confirmed, Income Tax remains an area frequently referenced in fiscal discussions.

Changes to the inheritance tax threshold

It is widely thought that IHT thresholds will be frozen for another year. The last time inheritance tax thresholds increased was back in 2009. If frozen again, this will mark 20 years without an increase, a record in UK tax history.

What Landlords and Property Investors Can Do Now Ahead of Budget 2025

Review your portfolio, rental income, borrowing costs and tax structure to model potential impacts of NI or CGT changes.
Ensure your accounting systems are prepared for MTD quarterly submissions from April 2026.
Consider whether a limited company structure may be more efficient for long term planning.
Monitor government announcements as the Budget approaches.
Prepare for several possible outcomes, including increased compliance costs or tax changes.

With potential adjustments to rental income taxation, further reductions in CGT allowances and confirmed moves toward digital reporting, landlords face an increasingly complex landscape. Early preparation can help protect overall profitability.