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The Autumn Budget 2025 will go down in history for the absolutely unprecedented tidal wave of leaks – as to what may or may not be announced – in the weeks (and even in the minutes) leading up to it.
Now the Budget has been delivered, let’s look at what actually did – and didn’t – happen from a property point of view. And how it might impact the market going into 2026.
1. Council Tax …. and the much-rumoured Mansion Tax
The biggest property-related leak in the weeks before the Budget was that Council Tax would be reformed and a new ‘mansion tax’ on higher value homes would be introduced.
The rumours proved to be true – sort of.
But, thankfully, the new tax won’t affect homeowners with a property worth over £500,000 as was originally feared.
Rachel Reeves announced a new Higher Value Council Tax surcharge starting at £2,500 a year for homes worth over £2 million and scaling up to £5,000 for homes over £5 million.
2. Stamp Duty
In recent years, as house prices have risen, Stamp Duty has become a bitter pill to swallow – especially for first time buyers.
It was thought Rachel Reeves might make some changes to get the housing market moving. And even that a new mansion tax might replace Stamp Duty for more expensive homes.
In the event that no changes were made this year.
3. Capital Gains Tax
Capital Gains Tax isn’t payable on your main home. It is charged when selling second homes and investment property like buy-to-lets.
At the last Budget, Rachel Reeves hiked CGT generally, but left it pretty much unchanged for property.
There were rumours that there might be big changes that would affect the property market this year. Such as a further CGT rise. Or even a limit on or total removal of main residence relief.
As it happened, nothing happened here either, which will be welcome news to property owners.
4. Income Tax on earnings
The much-leaked possible rise in Income Tax rates didn’t happen.
However, the freeze on personal Income Tax allowances and thresholds –already frozen until 2027/28 – was extended until 2030/31.
In effect, by way of what’s known as fiscal drag, this is a year-on-year tax rise. It will hit everyone who’s working and is thinking of buying a home or moving.
5. Income Tax on savings and property income
It was rumoured that the Budget would impose National Insurance contributions on rental income.
But, rather than an NI rise, Rachel Reeves announced a somewhat sneaky 2% rise in the basic (to 22%), higher (to 42%) and additional (to 47%) rates of Income Tax chargeable on both savings and property income.
This will affect buy-to-let landlords, as well as anyone with savings.
So how might the Budget affect the market in 2026?
A long-standing Labour commitment was not to raise the rates of Income Tax, National Insurance and VAT on what they call working people.
Rachel Reeves used a smoke-and-mirrors approach – beloved of most Chancellors – to make it seem like this promise had been kept.
However, experts estimate that the Budget brings in an estimated £26 billion of tax rises.
At the end of the day, this is likely to make us all a little poorer. Or at the very least feel like we are.
The Budget for homebuyers
It only takes one leak to sink a ship …. as the old saying goes. Something we hope the Government will take on board.
The many leaks over the last few weeks have certainly made buyers and sellers a bit more timid.
Now that the Budget is out, everything is a bit more certain. And certainty is usually a positive thing for the property market.
If you’ve been thinking about moving, you can now look ahead and plan with a little more certainty than before.
Some good news on the horizon is that many experts predict interest rates will be cut again when the Bank of England next meets on 18 December. Either way, the cost of repaying a mortgage is likely to fall in 2026.
The Higher Value Council Tax surcharge won’t affect most buyers. In fact, it may create more interest in prestige homes under the £2 million threshold.
The Budget for Sellers
Sellers should bear in mind that, whatever happens in the economy, a well-presented, accurately priced property will generally always get buyer interest.
If you’ve been thinking about selling, now might be a good time to ask us for an up-to-date market valuation.
The Budget for Landlords
The 2025 Budget is a watershed moment for buy-to-let landlords. After several recent tax rises, the Income Tax rise on property income will come as a particular pain point.
And that’s on top of the Renters’ Rights Act, which comes into operation in England on May 1 2026.
More than ever before, that means it’s time for landlords to take stock of their portfolio and decide what to do next.
We hope you’ve found our Budget 2025 roundup helpful. If you know someone who might find it useful, please share it with them.
(NB. Some taxes differ outside England. For example, Stamp Duty in Scotland and Wales and Income Tax in Scotland are set by their own Governments.)
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