Higher taxes on the horizon for property owners – UK Autumn statement 2025 predictions

Labour has pushed this year’s Autumn statement to late November from its usual October schedule, as pressure mounts on the government to fix its fiscal deficit. Left with no other option to increase revenue, experts predict that the Treasury, led by Chancellor Rachel Reeves, may raise income taxes, VAT, or National Insurance.

Is there a need to increase taxes in the UK?

The National Institute of Economic and Social Research (NIESR), in its latest report, said that moderate and sustained tax rises would be necessary in the upcoming Autumn statement on November 26 to close the spending gap, which currently exceeds £40bn. Even an increase of 1% in the current rate of income tax (including basic, higher and additional rates) could add up to £10bn to the government’s tax revenue.

Best ways to structure London property investments to minimise tax

What taxes, if increased, will affect landlords and property owners?

While higher income taxes, VAT, and National Insurance (NI) contributions directly affect the finances of the working class, there are a few rumoured tax changes that are likely to affect landlords and property owners as well.

National Property Tax instead of Stamp Duty

In one of the strongly rumoured landmark changes to impact property transactions, the Treasury is said to be considering an overhaul of the current Stamp Duty Land Tax (SDLT). SDLT, which buyers currently pay, will be replaced with a National Property Tax levied on sellers with properties worth over £500,000.

While SDLT is estimated to be paid by 60% of buyers, the new tax will affect only 20% of all sellers across the UK. However, in London, where 59% of properties are valued over £500,000, more sellers will be affected by the new tax regime. Meanwhile, SDLT for second-home purchases (including BTLs) is expected to remain unchanged.

National Insurance for landlords

There has been widespread speculation about the introduction of NI contributions on rental income, with experts suggesting that an 8% levy could raise around £3bn for the Treasury. Widening the scope of NI would mean the nearly 3,60,000 landlords who earn between £50,000 and £70,000 a year will need to pay an extra £1,000 in taxes, leading to a 10% drop in net rental income for some landlords.

Will tenants pay the price of tax rises?

As seen in the past, landlords will most certainly look to increase their asking rents to offset the additional taxes imposed by the government. Many landlords may also consider selling their properties, as a leading BTL mortgage broker revealed that 45% of portfolio landlords would sell their assets or trim down their portfolios if NI is levied on rental income.

Will the Capital Gains Tax (CGT) on property sales increase?

In last year’s Autumn Statement, the CGT rate on property sales was left unchanged. However, there is speculation that Labour could change that in the upcoming statement. There are no official reports yet on how much of a change to expect. At current levels, the CGT rate for selling a property is 18% for basic rate taxpayers and 24% for higher and additional rate earners. Experts are also speculating on a further reduction in the CGT allowance, which was cut from £12,300 in 2022/23 to £3,000 for the 24/25 and 25/26 tax years.

Will Inheritance Tax thresholds be reduced?

The current threshold of £325,000 for calculating Inheritance Tax (IHT) at 40% has been left unchanged since 2009. However, there are discussions that the upcoming Statement might look to reduce the threshold to get more estate owners to pay IHT. The government has already made changes to the IHT rules, including the unspent pensions of an individual within the scope of IHT from April 2027 onwards.

Stay updated with Benham and Reeves

We keep a close watch on the latest developments in the UK economy and their impact on landlords and property investors. Our 21 branches are strategically located across London to help our clients with all their property needs in the UK. Paying taxes correctly and on time is the best way to avoid hefty fines and penalties, and we offer a dedicated tax return service for our overseas clients.

Join our exclusive post Statement webinar

There are many landlords and property owners who are anxiously waiting to know what the upcoming Autumn Statement has in store. Is there a wave of additional taxes approaching? We have the Economics Editor of the Sunday Times, David Smith who will join our Director, Marc Von Grundherr to decode the updates of the Autumn Statement on the very next day it is announced. Register now to be a part of this insightful and educational webinar to safeguard and grow your London property investments.