The tax environment for private landlords in England has changed materially in 2026, with further changes confirmed for April 2027. Understanding what is already in force, what is coming, and how these changes affect net returns is one of the most important planning exercises landlords can undertake.
These changes are not future proposals. Several are already applying, while others have been confirmed and require landlords to plan ahead.
What is already in force: Making Tax Digital
From 6 April 2026, landlords whose gross rental and self-employment income exceeded £50,000 in the 2024/25 tax year are required to keep digital records and submit quarterly updates to HMRC using approved software.
The first quarterly submission covering 6 April to 5 July 2026 is due on 7 August 2026. While Making Tax Digital does not introduce a new tax, it does change how landlords must record income and expenses throughout the year rather than relying on annual summaries.
The income threshold reduces to £30,000 from April 2027 and £20,000 from April 2028, bringing more landlords into the system over time. Landlords operating in personal names should ensure they have registered, selected suitable software, and established a compliant record-keeping process.
What is confirmed for April 2027: Higher property income tax rates
From 6 April 2027, property income will be taxed at separate rates from other income sources. The new rates will increase the tax cost of rental profits for landlords who own property personally rather than through a company structure.
The impact will vary depending on individual circumstances, but landlords with significant rental profits should review their forward projections now rather than waiting until the changes take effect.
The Section 24 mortgage interest restriction will continue, meaning individual landlords remain unable to fully deduct mortgage interest from rental income. Instead, relief is provided through a basic rate tax credit.
The personal allowance ordering change
Changes to how allowances and reliefs are applied from April 2027 may affect landlords with multiple income sources. In some circumstances, rental income may become taxable where allowances have already been used against employment, trading, or pension income.
Landlords with mixed income streams should review how these changes could affect their overall tax position.
Capital gains tax
Landlords considering selling investment properties should factor capital gains tax into their plans. Residential property gains remain subject to capital gains tax rules, with reporting and payment required within 60 days of completion.
Planning ahead is essential, as failing to account for potential tax liabilities can significantly affect the final return from a property sale.
What to do now
Landlords should review their current Making Tax Digital position, ensure appropriate record-keeping systems are in place, and model how future tax changes could affect portfolio performance.
For landlords with larger portfolios or changing circumstances, professional advice on ownership structures, tax planning, and long-term strategy may be valuable before April 2027.
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