29/10/2026
I know this could be classed as a boring subject but its information we believe you should know so I thought it might be useful to set out the tax position relating to property.
We are not tax advisers so you should always contact a qualified tax adviser to get advice bespoke to you.
Family property - This remains unchanged. There is an additional £175,000 tax-free allowance when passing down a primary residence to the next generation - known as the Residence Nil-Rate Band. This sits outside of and in addition to the £325,000 inheritance tax allowance. If the net value of an estate is higher than £2m, the Residence Nil-Rate Band reduces by £1 for every £2 above that threshold. Therefore, above an estate value of £2.35m the Residence Nil-Rate Band doesn’t apply.
It’s important to note though, that unused thresholds can be transferred with t
he estate to a spouse or civil partner, allowing them to potentially pass on up to £1m tax free (2x £325k + 2x £175k).
HOW THE BUDGET COULD AFFECT PROPERTY
A Rise Above Income Tax on Rental Income
As with savings, income tax on income from rental properties will rise from April 27 by 4% above the standard rates - to 24% for basic income tax payers, 44% for higher income tax payers and 49% for additional rate payers.
Stamp Duty
This remains unchanged. Stamp duty in England has not changed and remains at -
• Up to £125,000: 0%
• £125,001 to £250,000: 2%
• £250,001 to £925,000: 5%
• £925,001 to £1.5 million: 10%
• Over £1.5 million: 12%
Additional Properties
This remains unchanged. If you are purchasing additional properties such as a buy-to-let or a second home, then a 5% surcharge applies on the stamp duty.
Non-UK residents must pay an additional 2% in England or Northern Ireland if they are present in the UK for less than 183 days in the 12 months prior to purchase.
When it comes to council tax on second homes, many local authorities are already applying a double rate for homes not rented out.
Property and Capital Gains Tax (CGT)
This remains unchanged. CGT on a property sale must be paid within 60 days of completion and this also applies for property sold overseas. However, CGT does not apply to inherited properties as a property is inherited at the current market value.
A Charge for High Value Properties
The ‘mansion tax’ or High Value Council Tax Surcharge (HVCTS) is due to come into effect from April 2028. Currently, residential properties in England worth £2 million or more, as valued from 2026, will be liable to a recurring annual charge in addition to council tax.
• £2m - £2.5m: £2,500 per year
• £2.5m - £3.5m: £3,500 per year
• £3.5m - £5m: £5,000 per year
• £5m and above: £7,500 per year
