Landlords and savers: income tax on rents and interest rises to 24%, 44% and 49%
From April 2027, property and savings income get their own rates of income tax, four points above the rates on earnings. Here is what it costs, and what you can still do about it.
Budget 2025 had already announced that tax on property and savings income would rise by two percentage points from April 2027. Budget 2026 adds another two points from the same date. The government says 84% of income tax payers will not be affected.
Higher and additional rates rise the same way, to 44% and 49%.
Show the data
| 2026/27 (the main rate) | 20% |
|---|---|
| Budget 2025 plan | 22% |
| From April 2027 | 24% |
What it means for a landlord
A basic-rate landlord with £20,000 of taxable rental profit pays £4,000 in 2026/27. On the same profit in 2027/28, the bill is £4,800. For a higher-rate landlord, the same profit costs £8,800 instead of £8,000. The new rates apply in England, Wales and Northern Ireland; Scotland sets its own.
What it means for savers
Savings rates rise to 24%, 44% and 49% across the UK. The Personal Savings Allowance stays at £1,000 for basic-rate and £500 for higher-rate taxpayers, and savings held in ISAs remain tax-free. The Budget also confirms that the cash ISA limit stays at £20,000, reversing a planned cut.
Worth reviewing before April 2027
- Who owns each property, and in what shares, between spouses or civil partners.
- Whether income-producing savings would be better held in ISAs or pensions.
- Whether repairs and allowable costs fall in the right tax year.
- For larger portfolios, whether ownership through a company now makes more sense.
The new rates are to be legislated in Finance Bill 2026-27. Moving property between owners can trigger Capital Gains Tax and Stamp Duty Land Tax: take advice first.
This insight is general information, not advice for your circumstances. Talk to us before acting on it.