Autumn Budget 2025: key tax changes for housebuilders and developers

The Autumn Budget 2025 reaffirmed the government’s commitment to deliver 1.5 million homes in England this Parliament, supported by major initiatives such as the £39 billion Social and Affordable Homes Programme and the £16 billion National Housing Bank.

Ahead of the Budget, ministers announced plans for new towns and devolved housing funds to accelerate development, alongside measures to remove barriers to growth. As the Chancellor noted, these steps aim to “unlock more new homes across the country”.

For housebuilders and developers, the Budget introduces changes that support these ambitions together with various compliance developments and potentially increased costs in some areas.

Landfill tax: reversal of single rate proposal

There is good news for housebuilders who were facing a potentially expensive increase in landfill taxes. The Treasury has reversed plans to introduce a single rate of Landfill Tax following significant industry representations, which argued that the change would hinder the government’s housebuilding targets.

The current two rate system, distinguishing between more and less polluting materials, will remain. However, costs are still expected to rise as the standard rate of Landfill Tax is set to increase in line with inflation, with the lower rate rising by the same absolute amount. This will begin to narrow the gap between the two rates.

VAT zero-rate consultation for social housing

In a welcome move the Treasury has announced a consultation on expanding the zero-rate of VAT to encourage and accelerate social housing construction. Saffery has long engaged with industry groups and major housebuilders on this issue, highlighting the challenges posed by the current ‘golden brick’ rules.

Under existing legislation, the zero-rate applies only once each new home is partly constructed, creating tension with funding schemes that require registered providers (RPs) to own land before releasing funds. If zero-rating or funding is unavailable at the right time, certain sites become unviable for social housing. A favourable outcome from this consultation should help the government with its ambitious housebuilding targets.

Consultations on international student levies and a potential tourist tax

The government has announced two consultations that could have implications for property investors in the student accommodation and hospitality sectors.

From August 2028, universities in England may be required to pay a flat fee of £925 per overseas student (over a set limit) each year, with the aim of using these funds to subsidise domestic students. While this proposal may be welcome in some respects, it could affect universities’ ability to attract overseas students and, in turn, impact demand for purpose-built student accommodation.

Tourism remains a major industry for the UK, and hotels and holiday parks continue to be a significant asset class for investors. A new policy, similar to those in many European cities and due to be introduced in Edinburgh in 2026, followed by Glasgow and Aberdeen and potentially Welsh cities from 2027, will allow regional mayors to levy an overnight tourist tax on stays in hotels and other tourist accommodation. While the additional funding for local infrastructure and culture may be positive, the potential for reduced demand for tourist accommodation and hotels is an important consideration for investors.

HMRC digital transformation: what it means for developers

The Budget reinforced HMRC’s commitment to becoming a data-driven organisation, announcing several initiatives that will impact compliance processes. These include:

• Plans to standardise corporate tax returns, likely requiring increased data tagging and detail sharing,
• The introduction of real-time digital prompts, for VAT from April 2027 and for corporation tax from April 2028,
• Enhanced powers and increased penalties for non-compliance, and greater use of direct debit for VAT and PAYE, and
• Significantly expanding HMRC’s use of third-party data, including card sales and interest income, to validate company submissions.

Combined with the planned introduction of e-invoicing in 2029, these changes mean businesses should review tax compliance processes now to avoid inconsistencies and leverage digital transformation for efficiency.

Corporate interest restriction (CIR) reporting simplification

The government has announced reforms to simplify CIR administration. The 12-month deadline for appointing a reporting company will be removed, allowing retrospective appointments for periods ending on or after 31 March 2024. From 31 March 2026, appointments will be confirmed within the CIR return itself, replacing the current notification requirement.

However, a new £1,000 penalty will apply if a CIR return is submitted without a valid appointment. Additional electronic filing and disclosure changes will follow for periods ending on or after 31 December 2026.

Land Remediation Relief (LRR)

The LRR consultation was not mentioned in the Budget document and the Treasury has separately confirmed that no action is intended to be taken at this time. The Treasury is continuing to review the responses to the consultation and will publish the outcomes in due course.

How we can help

These changes present both challenges and opportunities for housebuilders and developers. Our team can:

• Advise on the potential impact of VAT and landfill tax changes,
• Assess the implications of the proposed international student levy and tourist tax,
• Review compliance processes to prepare for HMRC’s digital transformation, and
• Support with CIR reporting and other corporate tax obligations.

If you would like to discuss any of these developments, please speak to your usual Saffery contact or get in touch with Sean McGinness.