Separate income tax rates for property income
This is not stamp duty. From 6 April 2027, property income is taxed under its own set of rates: 22% at the basic level, 42% at the higher level and 47% at the additional level.
A different tax entirely
Stamp duty, LBTT and LTT are transaction taxes paid once, when a property is bought. This change is to income tax, which is paid every year on the profit a property produces. The two are unconnected in law and in timing, and a rental profit figure never belongs in a purchase tax calculation. The reason the change appears on a stamp duty site at all is that it lands on the same people: the landlords and second-property buyers who already pay the additional-property surcharge on the way in are the ones who will pay these rates on the way through.
What changes
Property income currently sits inside the main income tax rates alongside employment and other income. From 6 April 2027 it is carved out and given its own rate set, applied according to which band the income falls into: 22%, then 42%, then 47%. The banding structure remains familiar, so the practical effect for most landlords is a change in the rate applied rather than in how the calculation is built. How the new rates interact with existing reliefs, allowances and finance costs is a matter for the legislation and current HMRC guidance.
Who it affects
Anyone receiving rental profit from residential or commercial property is in scope, whether that is a single let flat or a larger portfolio held personally. It does not affect people who own only their own home. Property held through a company is taxed under the corporation tax rules rather than under income tax, so these rates do not apply to it, though the surcharge on the purchase still does. For an individual weighing a buy-to-let purchase, the transaction cost and the ongoing tax on the income are two separate calculations that need to be made separately.
Working from the current position
Rates announced ahead of a start date can be amended before they take effect, and the surrounding rules on allowances and deductions can move independently of the headline rates. The position stated here reflects the announcement and is stamped with the date it was verified. Anyone modelling the return on a property should confirm the current rates and rules with HMRC or an accountant rather than relying on a figure read some months earlier, particularly where a decision turns on the margin between one rate band and the next.
Key points
- Not stamp duty: this is income tax on rental profit, charged annually.
- From 6 April 2027 property income has its own rates of 22%, 42% and 47%.
- It hits the same audience as the additional-property surcharge, but it is a separate calculation.
Common questions
Is this a new stamp duty charge?
No. It is an income tax change affecting the profit a property produces each year. It has no effect on the tax due when a property is purchased.
Does it apply to property held in a company?
No. Company profits are taxed under the corporation tax rules. These rates apply to property income taxed on individuals.
When do the new rates start?
From 6 April 2027. Confirm the current position with HMRC or an accountant before relying on it, as announced rates can change before they take effect.
Written by StampBand Editorial, published by Inventum. Rates verified 9 August 2026 against HM Revenue & Customs, Revenue Scotland and the Welsh Revenue Authority.