Property and savings tax increased
The income tax rates applying to property and savings income were due to increase by two percentage points from April 2027, as announced at Budget 2025.
The Chancellor has now announced plans to add a further two percentage points taking the total increase to four percentage points at each level of taxable income.
From 6 April 2027 for taxpayers in England, Wales and Northern Ireland the rates applied to property and savings income will be:
| Tax band | Total taxable income | 2026-27 | 2027-28 |
| Basic rate | £12,571–£50,270 | 20% | 24% |
| Higher rate | £50,271–£125,140 | 40% | 44% |
| Additional rate | Over £125,140 | 45% | 49% |
Property income tax rates in Scotland may differ. Savings rates apply across the UK. The income tax rates for trading, employment and pension income are unchanged.
For individual landlords, a basic rate tax reduction is available for qualifying residential finance costs. This is generally (but not always) calculated as 20% of qualifying costs and will increase to 24% from April 2027.
Individuals with savings income, such as bank or building society interest, may also benefit from the Personal Savings Allowance (PSA). This is the amount of savings income you can receive tax-free, depending on your tax band. The PSA is £1,000 for basic rate and £500 for higher rate taxpayers. Lower income savers could also be entitled to an additional relief, the Starting Rate for Savings, worth up to £5,000 of tax-free savings income per year.
If you have property and/or savings income, we can help you understand how these changes will affect your tax position.
