Autumn Budget 2025: Topical discussion points for UK homeowners and landlords

With the Autumn Budget 2025 just around the corner, speculation is mounting about changes that could affect homeowners and landlords. This article explains the main proposals we understand being discussed and what they could mean for you.

Possible tax changes under discussion

Mansion tax

One of the most talked-about ideas is a new ‘mansion tax’ on higher-value homes. Reports suggest this could take the form of:

• An annual charge of 1% on the value above £2 million, and/or
• Removing the capital gains tax (CGT) exemption provided by private residence relief on the sale of main residences by higher or additional rate taxpayers for more than £1.5 million.

Example 1

If an annual charge is introduced as described above, and your main home is valued at £5 million you would have to pay a new annual tax charge of £30,000 (£5 million – £2 million × 1%).

Example 2

Currently, if you sell your home for £5 million and you bought it for £4 million, you pay no CGT because of private residence relief. If you’re a higher rate taxpayer and the relief is removed, you could face a CGT bill of up to £240,000 (24% of the £1 million gain).

Both measures aim to target wealthier property owners. With the first there will be practical issues around how homes are valued and how those who are asset-rich but cash-poor will be able to pay the new charge. The second measure raises concerns that it could discourage older or long-term owners from moving, reducing the supply of homes and affecting the wider market. It would also go against what Sir Kier Starmer said during the 2024 general election campaign, where he explicitly ruled out people paying CGT on the sale of their main home, “absolutely” guaranteeing that it wouldn’t happen over the next parliament.

SDLT replaced with a national property tax

Stamp Duty Land Tax (SDLT) has long been criticised as a barrier to home ownership and to people moving. The government is reportedly considering abolishing SDLT for owner-occupied homes and replacing it with a national property tax. The idea for replacing SDLT apparently draws on the findings of a report from the centre-right thinktank Onward, published in August 2024, which proposes a national property tax to replace SDLT and a local tax to replace council tax.

Under the speculated proposals, the national property tax would apply to homes worth over £500,000, with rates starting at 0.54% and rising to 0.81% for properties worth more than £1 million. Unlike SDLT, the new tax would be calculated as an annual charge but paid by sellers in one lump sum when they move, not by buyers at the time of purchase.

Example 3

Selling a home for £650,000 after owning and living in it for ten years:

• Current SDLT, with various assumptions (buyer pays): £22,500 upfront (£125,000 × 0%, £125,000 × 2%, £400,000 × 5%).
• If the new levy is introduced (seller pays): £8,100 (£650,000 − £500,000) × 0.54% × 10 years).

Example 4

In contrast for someone selling a home for £2 million after owning and living in it for twenty years:

• Current SDLT, with various assumptions (buyer pays): £153,750 upfront (£125,000 × 0%, £125,000 × 2%, £675,000 × 5%, £575,000 × 10%, 500,000 × 12%).
• If the new levy is introduced (seller pays): £216,000 (£1 million − £500,000 × 0.54%) + (£2 million – £1 million × 0.81%) × 20 years).

It’s not expected that the new tax would replace SDLT on second homes, including buy-to-lets, nor the non-resident SDLT supplement. It would take time to phase in a replacement to SDLT, and a range of options are being considered for phasing in changes.

It’s not clear how these changes would affect the SDLT alternatives in Scotland (Land and Buildings Transaction Tax) and Wales (Land Transaction Tax).

National Insurance on rental income

A significant change for landlords could be the introduction of National Insurance on rental profits. Currently, income tax is paid on rental income but not National Insurance Contributions (NICs) as it’s not classed as ‘earned income’.

If NICs were introduced for landlords in a similar way to how it applies to self-employed people, based on current year rates landlords would pay Class 4 NICs at a rate of 6% on rental profits between £12,570 and £50,270, and 2% on profits above £50,270, with no NI due on profits below £12,570. Note that currently people over State Pension age don’t pay Class 4 NICs.

Suggested actions ahead of the Budget

1. If you’re planning to sell, buy, or restructure property holdings, seek professional advice to determine whether adjusting the timing would be prudent in light of possible changes.
2. Subscribe to receive our Budget analysis and register for one of our Budget events to stay informed about any developments.

How we can help

If you have questions about your property plans or want to understand how possible changes could affect you, we can help you review your options, plan for different scenarios, and stay informed as any announcements are made.

If you’d like to discuss any of the above, please speak to your usual Saffery contact or get in touch with Zena Hanks.

Disclaimer

We will not know until 26 November whether any of these changes will be introduced. This article is based on potential impacts and should not be relied on as financial or legal advice. Acting solely on anticipated tax changes could leave taxpayers worse off. For guidance tailored to your circumstances, please consult a qualified professional.