The 2025 Autumn Budget has delivered several headline-grabbing property tax changes, and a few headline-busting non-changes. Below is a summary of the key points that matter for those looking to buy, sell, let or stay put.
What’s staying the same — and why that matters
-
No change to stamp duty: Despite widespread speculation ahead of the Budget, there was no reform of the stamp duty regime.
-
No new annual tax on £500,000+ homes: The much-rumoured “property-tax for mid-price homes” has not materialised — a relief for many buyers around that price band.
Why this matters: It means the majority of home-buyers (and many sellers) do not face any additional tax burden — and can proceed with more certainty. For mid-market homes this continuity supports ongoing affordability and becomes a stable basis for decisions.
What has changed — for high-value homes and landlords
New “mansion tax” on £2 million+ homes
-
A new annual high-value council tax surcharge will apply from April 2028 to homes valued at £2 million and above.
-
The surcharge is forecast to be £2,500 for a £2M–£2.5M home, rising to £7,500 for homes above £5 M.
-
Fewer than 1% of homes are affected — the Budget estimate is that only around 0.5% of UK homes fall into this band.
What this means: For most of our clients, this won’t have any direct impact. But for anyone with a high-value home — whether considering selling, buying or staying put — the additional ongoing cost may influence decisions. We may see slower demand at the very top end, or hesitancy to move until values stabilise around the new tax environment.
Higher tax on rental income from 2027
-
From April 2027, income tax on rental income will rise by 2 percentage points across all bands.
-
That means typical landlord income tax rates will move to 22%, 42% and 47% depending on income.
Potential consequences for the rental market:
-
Landlords may see lower net returns — which could discourage investment or prompt some to exit the buy-to-let sector.
-
Some may attempt to pass on costs to tenants through higher rents, which could lead to increased rental prices — especially in areas with tighter supply/ demand balance.
-
Others may decide to sell — potentially increasing the number of homes available for sale, slightly boosting supply in the medium term.
The market’s immediate reaction — and what agents are seeing
Even before the Budget landed, uncertainty around what it might include was already affecting the market. According to the latest data from Zoopla:
-
Buyer demand has dropped, and agreed sales have fallen — the first annual drop in two years.
-
The number of homes for sale is up (more properties available), which can increase competition for sellers.
From the perspective of Rightmove — the uncertainty alone, especially around the potential for new taxes, has caused many would-be buyers and sellers to “press pause.” In fact, sales agreed for £2 million-plus homes are already down 13% year-on-year.
It appears the market is taking a “wait and see” attitude — many people feel better off waiting until the dust settles before making decisions.
What it means for you — tips from JW Wood
Whether you’re buying, selling or renting, here’s what to keep in mind:
-
If you’re a mid-market buyer or seller: The lack of changes to stamp duty and absence of new tax on £500k+ properties means now could be a good time to act — the tax environment remains stable.
-
If you own a high-value home (> £2M): Factor in the future “mansion tax” when evaluating long-term costs. The sooner you plan, the less likely the surcharge will catch you by surprise.
-
If you’re a landlord or considering buy-to-let: The increased income tax on rent will squeeze margins — so it’s worth recalculating yield projections now. If you’ve been on the fence about investing, you might want to get good advice.
-
If you’ve been putting moving plans on hold: With much of the tax uncertainty removed now, this could be a good window to revisit your plans. Buyer demand may pick up as confidence returns.
What to watch next
While the Budget brought clarity on several fronts, the broader economic and market context remains dynamic. In particular:
-
How landlords respond to higher taxes — whether by increasing rents, selling properties, or absorbing costs — will shape supply in both the rental and sales markets.
-
Whether buyer demand rebounds in 2026 as uncertainty fades — which could push up prices or speed up sales.
-
How valuations behave, especially for high-end homes, as the “mansion tax” implementation date approaches.
The 2025 Autumn Budget represents a mixed bag for the housing market. For most people — especially mid-market buyers and sellers — it delivers stability by leaving stamp duty untouched and steering clear of broad-brush new taxes. But for investors, landlords or owners of high-value homes, the landscape is less straightforward.
At JW Wood, we believe this is a moment for steady heads and strategic thinking. If you’re considering buying, selling or letting a property in the coming months — now is a good time to talk to us. We can help you understand what the Budget means for your property, not just the headlines.