Landlord tax rise 2027: new rental income tax rates and why landlords are moving homes into companies

Updated 9 Nov 2026, 10:57 · First published 9 Nov 2026

Landlords in England and Northern Ireland will pay 2 percentage points more income tax on their rental profits from April 2027. That is pushing many to look again at how they own their properties, and some are moving them into limited companies.

The new property income rates were announced in the November 2025 Budget. They apply to rent received by individual landlords, not to companies.

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How much more will landlords pay?

A basic-rate landlord with £10,000 of taxable rental profit would pay £200 more a year. A higher-rate landlord with the same profit would also pay £200 more, and someone with £50,000 of profit would pay £1,000 more.

Why are landlords moving properties into companies?

Limited companies pay corporation tax on their profits instead of income tax, and they can deduct all their mortgage interest as a cost. Individual landlords only get a 20% (from 2027, 22%) tax credit on interest.

But advisers warn that moving property into a company is not a simple fix. It can trigger stamp duty and capital gains tax on the transfer, company mortgages are often more expensive, and taking money out of the company means more tax on salary or dividends.

Not financial advice: everyone’s situation is different. Landlords thinking of changing how they hold property should speak to a qualified tax adviser first.

Will renters pay more?

Landlord groups have warned that higher taxes could push some landlords to sell up or raise rents. Rents are already at record levels in London, where the average private rent is well over £2,000 a month.