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The 2025 Autumn Budget sets out the government’s updated tax and spending priorities, including several decisions with direct implications for homeowners, buyers, landlords and investors. Although there had been widespread speculation around major reforms, such as a complete overhaul of council tax or a restructuring of stamp duty, the Budget ultimately delivered a more measured set of changes. These focus largely on high-value homes and rental-property income rather than the mainstream housing market.
Autumn Budget: Key Property Measures
No Change to Stamp Duty
The government has chosen to leave Stamp Duty Land Tax (SDLT) unchanged. Given how disruptive previous SDLT reforms have been for transaction volumes, this continuity may be seen as a stabilising move. Buyers at typical price points avoid any new up-front tax burdens, which should help maintain market activity.
New Annual Surcharge on Homes Over £2 Million
From April 2028, a new annual charge will apply to properties valued above £2 million:
- Homes between £2 million and £2.5 million will face an approximate £2,500 yearly levy.
- Properties worth more than £5 million will pay around £7,500.
This is designed to target wealth concentrated in the highest-value homes. Although it affects only a small percentage of properties nationwide, it introduces a meaningful additional ongoing cost for those at the top end of the market.
Increased Tax on Rental Income
Landlords and property investors will face higher taxes from April 2027. Standard income-tax rates on rental income will rise by two percentage points, increasing the basic, higher and additional rates to 22%, 42% and 47%.
This is another squeeze on private landlords, who have already weathered a series of cost pressures in recent years. Reduced net yields may lead some to reassess the viability of their portfolios, potentially increasing the trend of landlords leaving the market.
What Didn’t Happen
Notably absent were several widely discussed proposals: there is no broad annual property tax, no restructuring of council tax bands, and no overhaul of SDLT for mainstream buyers. This will come as a relief to many homeowners who feared more sweeping changes.
What This Means in Practice
First-Time Buyers and Typical Homeowners
For the majority of households, the impact is minimal. With SDLT unchanged and no new tax pressures on moderately priced homes, first-time buyers and typical purchasers benefit from a relatively steady financial environment. This stability may help support confidence in the market heading into next year.
Landlords and Buy-to-Let Investors
The rental tax increase is likely to be felt more keenly. It may push some landlords toward rent increases to offset reduced margins, while others may choose to downsize or sell their portfolios altogether. Any decline in supply could add further pressure to rental prices, particularly in high-demand areas.
Owners of High-Value Homes
For those with properties above £2 million, the new surcharge could become a significant factor in ownership decisions. Some may bring forward planned sales to avoid the charge once it comes into force, while others may find that higher carrying costs affect affordability calculations for future purchases. The luxury end of the market may see more cautious price negotiation as buyers price in the new annual costs.
Overall Market Outlook
The Budget is unlikely to cause major shockwaves across the broader housing market. The lack of changes to SDLT removes a potential source of volatility, and the new surcharge is confined to the upper end of the market.
However, the private rented sector remains fragile, and the tax changes aimed at landlords could reduce rental supply further. If demand remains steady, this could continue to place upward pressure on rents over the coming years.