Everything buyers, sellers & property investors need to know about the Budget

If you haven’t got the patience to trawl through pages and pages of Autumn Budget news, don’t panic. White & Brooks has completed the reading for you and picked out the key announcements. Below are the changes that affect those involved in property.

Income tax is rising….but not on your wages

There was a rumour that income tax applied to wages was going to increase but the Chancellor abandoned this idea. Instead, she chose to increase tax that’s applied to any income earned from rental payments, dividends and savings.

Tax on only these income streams will rise by 2% in April 2027. As such, basic-rate taxpayers will pay 22% on rental income, landlords who are higher rate taxpayers will pay 42% and additional rate taxpayers will see their income tax rise to 47%. Although widely touted as a Budget inclusion, National Insurance applied to rental income never materialised.

Council tax bands are changing…but only for a few

Many MPs thought the Autumn Budget was the perfect time to announce a re-evaluation of council tax, as current bands are based on property values in 1991. Instead of widespread reform, however, the Chancellor chose to focus on the top three bands.

Homes in bands F, G and H will be re-evaluated by the Valuations Office Agency in 2026 so a new levy – dubbed the mansion tax – can be introduced. All homes worth more than £2 million will be subject to a new annual tax from 2028, ranging in cost from £2,500 to £7,500. This will be in addition to council tax and, at present, there look to be no exemptions or reliefs. Although not confirmed, there could be a way for those affected to defer this tax until after their death, with the sum being paid from their estate.

You can still save tax free in an ISA…but cash will be capped

ISAs are an efficient way to save money as everyone has a tax-free allowance. At present, people can choose to invest up to £20,000 across both cash or stocks and shares ISA but the Budget is ending this flexibility.

From April 2027, savers under the age of 65 will only be allowed to deposit £12,000 annually in a cash ISA. If they want to save the full £20,000 tax free, the remaining £8,000 must be put in a stocks and shares ISA. Those putting all of their savings into stocks and shares ISAs will enjoy the full £20,000 tax free allowance.

We also have to mention LISAs – the account that can be used by first-time buyers saving for a deposit. These are not subject to the new rules announced in the Budget but the Government will consult on LISAs in 2026. They will either be modified or replaced, hopefully with a product that carries less penalties but with the same contribution benefit.

You energy bills will fall…but the price cap may scupper savings

The Government has chosen to scrap some of the green energy schemes it imposed on energy suppliers after discovering costs were being passed on to consumers in the form of higher energy bills.

It will defund the ECO scheme, reduce the amount households pay towards the Renewables Obligation and make the unit rate of gas and electricity cheaper. The Government expects this to reduce the average energy bill by £150 a year. That said, the Government can’t control the energy price cap and any savings could be wiped out by future cap rises – the next one is due on 1^st January 2026.

Other taxes applied in property situations stay the same….for now

It was Benjamin Franklin that coined the phrase ‘nothing can be certain, except death and taxes’ and it’s never truer than when involved in property. Thankfully, the Chancellor chose to leave three property-linked taxes untouched.

There is no change when it comes to inheritance tax – paid by the estate of someone who has passed away, with property being the biggest tax liability; capital gains tax – paid on profits made when a second home or buy-to-let is sold; and corporation tax – applied to profits made when a buy-to-let owned by a limited company is sold.

That said, with a rumoured £22 billion deficit in the Government’s finances, raising these taxes may be a possibility when 2026’s Budget rolls around.

If you would like to discuss how the 2025 Autumn Budget has affected your current position and future property plans, please contact White & Brooks’s Chichester or Bognor Regis offices.