What's changing in UK property — and what to do about it
The rules that move an overseas investor's returns: SDLT surcharges, the new tax and tenancy regimes, energy standards and more. Each entry shows its status, who it affects, the action to take, and a link to the official source. Verified against gov.uk.
Bank Rate held at 3.75% (June 2026 MPC)
Who it affects: Leveraged BTL investors on variable/tracker rates or refinancing
What to do: Stress-test at ~3.75%+; MPC split 7-2 with inflation ~2.8%, so no imminent cuts signalled.
Renters' Rights Act 2025 — new tenancy regime; Section 21 abolished
Who it affects: All private landlords letting residential property in England, incl. overseas landlords
What to do: Section 21 'no-fault' evictions ended; ASTs convert to assured periodic tenancies. Use Section 8 grounds; update agreements.
Making Tax Digital for Income Tax (MTD ITSA) — first phase in force
Who it affects: Landlords/sole traders with qualifying gross income over £50,000
What to do: Keep digital records and file quarterly via MTD software. £30k from Apr 2027, £20k from Apr 2028. Non-resident landlords in scope.
MEES raised to EPC C for privately rented homes (by 2030)
Who it affects: Landlords of privately rented residential property in England & Wales
What to do: Warm Homes Plan targets EPC C-equivalent by 1 Oct 2030; cost cap up to £10,000. Plan upgrades now; regulations still to be laid.
Improving energy performance of rented homes — Government response (GOV.UK) ↗
Property income tax rates to rise 2 points from April 2027
Who it affects: All landlords with taxable UK rental profits, incl. non-resident landlords
What to do: From 6 Apr 2027 rental income taxed at 22%/42%/47%. Model the higher liability; confirm enactment via Finance Bill 2025-26.
Change to tax rates for property, savings and dividend income (GOV.UK) ↗
High Value Council Tax Surcharge ('mansion tax') from April 2028
Who it affects: Owners of English homes valued £2m+ (2026 prices), incl. overseas owners
What to do: Annual surcharge £2,500-£7,500 by band from Apr 2028; consultation ongoing. Assess exposure on high-value holdings.
Abolition of the Furnished Holiday Lettings (FHL) regime
Who it affects: Owners of short-term/holiday-let property (UK and overseas)
What to do: FHLs are now ordinary property businesses: basic-rate interest credit only, no BADR/rollover, no capital allowances on furnishings. Reassess structuring.
Abolition of the furnished holiday lettings tax regime (GOV.UK) ↗
Inheritance Tax moves to a residence-based regime (replaces domicile)
Who it affects: Overseas/non-dom investors; anyone UK-resident 10 of the last 20 tax years
What to do: IHT scope now set by the long-term-resident test, not domicile. UK real estate was always within IHT. Review estate planning/trusts.
Inheritance Tax if you're a long-term UK resident (GOV.UK) ↗
SDLT thresholds reverted (nil-rate band back to £125,000)
Who it affects: All buyers of residential property in England & NI
What to do: Nil-rate band £125,000 (2% on £125k-£250k); first-time-buyer relief cut to £300,000 (cap £500,000). Budget SDLT accordingly.
Additional-dwelling SDLT surcharge raised from 3% to 5%
Who it affects: Buyers of additional/BTL dwellings; overseas buyers (stacks with the 2% surcharge); companies
What to do: Surcharge is now 5% (was 3%); corporate >£500k flat rate rose to 17%. A non-resident company can face 2% + 5% + base rates. Recost acquisitions.
Building Safety Act 2022 — leaseholder protections, EWS1, remediation
Who it affects: Owners of flats in buildings 11m+/5+ storeys; owners of 4+ UK dwellings may lose 'qualifying lease' protection
What to do: Confirm whether each flat is a 'qualifying lease'. Portfolio/non-qualifying owners can face remediation costs; obtain EWS1 where the lender requires.
Capital Gains Tax 60-day reporting for UK property disposals
Who it affects: Non-resident sellers of any UK property/land; UK residents disposing of residential property at a gain
What to do: Report and pay CGT within 60 days of completion via an HMRC CGT-on-UK-property account. Non-residents must report ALL disposals (even nil gain).
Non-resident 2% SDLT surcharge
Who it affects: Non-UK-resident buyers of residential property in England & NI (incl. non-resident-controlled UK companies)
What to do: Add 2% to all residential SDLT rates if not UK-present 183+ days in the prior 12 months. Refund possible if you become UK-resident within 12 months.
Leasehold and Freehold Reform Act 2024 + commonhold reform (pending commencement)
Who it affects: Leasehold flat owners; buyers of new-build leasehold flats
What to do: LFRA 2024 is law but largely not yet in force; lease-extension/enfranchisement reforms delayed. Draft commonhold legislation to ban new leasehold flats is progressing. Factor delay into timing.
Leasehold reform: what's happening and when? (House of Commons Library) ↗
Non-Resident Landlord Scheme (NRLS) — standing requirement
Who it affects: Landlords with a usual place of abode outside the UK (absent 6+ months)
What to do: Letting agents/tenants deduct 20% basic-rate tax from rent unless HMRC approves gross payment. Apply on form NRL1 and file Self Assessment.
Source: All entries verified against gov.uk / legislation.gov.uk / Bank of England · As of 2026-07-09