| Today (2026/27 rules) | From 6 April 2027 | |
|---|---|---|
| Tax on property income | — | — |
| Total tax bill | — | — |
| Net property profit after tax | — | — |
What are the new property income tax rates?
The Finance Bill 2025-26 introduces separate income tax rates for UK property income, defining "property income" in its own right and taxing it after employment, trading and other income, but before savings and dividend income. From 6 April 2027, property income will be taxed at 22% basic rate, 42% higher rate and 47% additional rate — about 2 percentage points above the standard 20%/40%/45% rates that apply to other income today.
These new bands apply in England, Wales and Northern Ireland. Scotland has its own devolved income tax system and will decide independently whether to match, diverge from, or align with the new property bands.
Is this in force now?
No. As of 2026, property income is still taxed at the same standard rates as your other income (20%/40%/45%), simply added on top of your other earnings. The new isolated rates only take effect from 6 April 2027, once the Finance Bill 2025-26 receives Royal Assent — use the calculator above to see the difference this makes, but don’t plan your current-year filing around figures that aren’t law yet.
How does this interact with Section 24?
Section 24 (the mortgage interest relief restriction) is a separate rule about how your taxable rental profit is calculated — it doesn’t let you deduct mortgage interest directly, only a 20% credit. This 2027 change is about what rate that profit is then taxed at, once you already know the figure. If you have mortgage interest to account for, work out your net profit with our Section 24 Calculator first, then bring that number here.
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What are the new property income tax rates from April 2027?
From 6 April 2027, the Finance Bill 2025-26 introduces separate income tax rates for UK property income: 22% basic rate, 42% higher rate, and 47% additional rate — around 2 percentage points above today’s standard 20%/40%/45% rates. These apply in England, Wales and Northern Ireland; Scotland sets its own income tax and may set different property rates.
Is this in force now?
No, not yet in force as of 2026. The rates take effect from 6 April 2027, once the Finance Bill 2025-26 receives Royal Assent and passes into law.
Does this replace Section 24 (the mortgage interest relief restriction)?
No. Section 24 is a separate rule about how landlords calculate their taxable rental profit. These new property income rates are about what rate that profit is then taxed at, not how the profit itself is calculated.