Being a landlord in the UK means not just managing properties and tenants — it also means keeping up with changing tax rules that can directly affect your bottom line. 2026 brings some of the most significant shifts in landlord tax obligations in years — from how you report income to how much you pay when you sell a property.
Here’s a landlord-friendly breakdown of the key tax changes you should be preparing for:
? 1. Making Tax Digital (MTD) Becomes a Reality
One of the biggest changes for landlords in 2026 is the rollout of Making Tax Digital for Income Tax (MTD ITSA).
From 6 April 2026, HM Revenue & Customs (HMRC) will require many landlords with gross rental income over £50,000 a year to:
• Keep digital records of income and expenses.
• Submit quarterly income and expenditure updates to HMRC using approved software (e.g., FreeAgent, Xero, QuickBooks).
• Finalize an annual statement at the end of the tax year.
MTD isn’t a new tax, but it changes how you report tax. The admin burden will grow, especially if you’ve relied on annual self-assessment returns for years.
?Rental Income Tax Rates Are Set to Rise (from 2027)
Although technically taking effect in 2027, the tax system you prepare for in 2026 must reflect this upcoming change:
From April 2027, rental profits will be taxed at new ‘property income’ tax rates — and they’re higher than standard income tax rates. According to recent budget plans:
• Basic rate: 22% (up from 20%)
• Higher rate: 42% (up from 40%)
• Additional rate: 47% (up from 45%)
This is a direct hit to your net returns — especially if you hold properties in your personal name.
? This change compounds existing limitations on mortgage interest relief: landlords already only receive a 20% credit on finance costs rather than deducting them fully from rental profit.
?Capital Gains Tax (CGT) Rules Have Already Shifted
For landlords thinking about selling investment property, Capital Gains Tax is now aligned with higher rates:
• Basic rate CGT on residential property: 18%
• Higher rate CGT: 24%
These rates apply to disposals in the 2025/26 tax year and beyond. They also now match rates for non-property assets. The result? Selling a buy-to-let can be more expensive than it used to be, especially if you held the property for many years or made large gains.
?️ 6. Additional Surcharges & Future Considerations
Some changes are set to kick in after 2026 but are worth planning for now:
? High-Value Property Council Tax Surcharge (from April 2028)
Owners of properties worth over £2 million will pay an annual surcharge on top of normal council tax — starting at £2,500 annually and rising for more expensive properties. 
This won’t affect most landlords but is significant for high-end portfolios.
? Summary — What Landlords Need to Do Now
✔ Get MTD-ready: Implement digital accounting and software.
✔ Plan for higher tax bills: Build the upcoming 2% rental income tax increase into your cash flow forecasts.
✔ Review your portfolio: Consider timing disposals before CGT rises bite.
✔ Budget for admin costs: Quarterly reporting means more bookkeeping work.
✔ Talk to an accountant: Professional advice will save time — and tax.