Chancellor John Healey has announced a further two-percentage-point increase in tax on rental income, taking the total increase announced over two Budgets to four percentage points from April 2027.
The move came alongside £4.7bn of government-backed lending for first-time buyers, additional affordable housing investment and measures to ease household living costs.
However, there was no stamp duty reform or major new incentive to stimulate transactions across the existing housing market.
Here are the principal announcements affecting the property industry, businesses and households.
First-time buyers and homeownership
- Your First Home: £4.7bn of government-backed lending confirmed for the equity loan scheme launching in spring 2027.
- Deposits: Eligible first-time buyers purchasing qualifying new-build homes in England will be able to buy with deposits as low as 2.5%, supported by government equity loans of up to 20%.
- Eligibility: Income limits and local property price caps will apply.
- First-time buyer ISA: A new savings product will replace the Lifetime ISA.
- Lifetime ISA penalty: Savers buying homes above the existing £450,000 ceiling will be able to recover at least their original contributions.
- Stamp duty: No changes to existing rates or thresholds for home movers.
Landlords and the rental market
- Rental income tax: A further two-percentage-point increase from April 2027, on top of the two-percentage-point rise announced in November 2025.
- New tax rates: Basic, higher and additional property income tax rates will rise to 24%, 44% and 49% respectively – four percentage points above current levels.
- Stamp duty: No reduction in the surcharge on additional residential properties.
- Buy-to-let: No new incentives to encourage private rental investment.
- Rent a Room: The £7,500 annual tax-free allowance remains unchanged.
Housing supply and development
- Additional funding of £1.5bn for social and affordable housing.
- VAT relief on qualifying land sales to social housing providers.
- Cheaper borrowing for councils investing in housing.
- Biodiversity requirements removed for qualifying brownfield development sites.
- No major changes to building regulations for the remainder of this Parliament, except where necessary for safety.
- More than £400m over five years to extend the Government’s homelessness accommodation commitment indefinitely.
Energy bills and household finances
- Temporary VAT reduction on domestic electricity bills extended until July 2027.
- Household gas standing charges to be abolished, with costs transferred to unit prices.
- £100 winter energy payment for approximately 20 million households in Council Tax bands A to D.
- The 5p-per-litre fuel duty reduction extended until July 2027.
- Tariffs suspended on more than 100 supermarket products.
- Planned reduction in the annual cash ISA allowance scrapped.
Businesses and employment
- National Minimum Wage and National Living Wage rates to increase by 3.9%.
- Business rates relief eligibility threshold for qualifying retail, hospitality and leisure premises increased from £12,000 to £18,000.
- Tax-free business mileage allowance of 55p for the first 10,000 miles made permanent, with the rate above that rising to 35p.
- Bank surcharge increased from 3% to 6% for 15 months.
- Gambling machine duty increased from 20% to 25%.
- Paid parental leave extended to eligible self-employed fathers and partners.
Economic outlook and regional investment
- Office for Budget Responsibility forecasts growth of 1% in 2027 and 1.6% in 2028.
- Treasury investment appraisal rules to be revised to support more towns.
- Mayors to gain control over a growing proportion of business rates revenues, with further tax powers planned.
