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What is Property income rates?
Last verified 23 October 2026
Property income rates are separate Income Tax rates for rental and other property income, starting in the 2027 to 2028 tax year. Finance Act 2026 sets them at 22% (property basic rate), 42% (property higher rate) and 47% (property additional rate) for that year.
Why it matters to landlords
The government's technical note says the change takes effect from 6 April 2027 and the separate rates apply in England, Wales and Northern Ireland. Finance Act 2026 also lets the Scottish Parliament and the Senedd set property rates for their taxpayers from 2027 to 2028, so Scottish and Welsh landlords should check the rates that apply to them before then. Rates are set by Parliament each year and can change.
Relief for residential finance costs such as mortgage interest is given at the property basic rate of 22%, rather than 20%. The property allowance and the Rent a Room Scheme are unchanged, and carried forward property losses must still be set against property income. The note covers individuals, partnerships, trusts and estates.
Example
A higher rate landlord in England has £10,000 of rental profit in the higher band. At 40% that is £4,000 of tax; at the 42% property higher rate it is £4,200. Their £5,000 of mortgage interest gives a tax reduction of £1,100 at the 22% property basic rate.