A practical guide for accountants on upcoming tax changes for landlords established in the Autumn 2024 budget.
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Property investors are facing a conundrum right now. Mortgage rates are finally dropping, house prices seem to be stabilising, and rental yield and demand remain strong.
However, Rachel Reeves’ first budget as Chancellor drastically changed the calculations surrounding property investment.
As accountants, it’s evident that clients are grappling with crucial choices. Some are rushing to complete their purchases before April’s stamp duty changes. Others are asking whether their current ownership structures make as much sense as they once did.
Given the changes ahead, many are wondering if they should expand their property portfolios at all – and then there’s the issue of inheritance tax changes affecting long-term planning decisions.
So, that perennial question is, how do we help our clients plan ahead? Read on, and we’ll explore the changes in detail, how they impact your landlord clients, and how to adapt your advice accordingly.
Breaking Down the Tax Changes
The budget’s impact varies dramatically depending on your client’s circumstances. Timing has become critical for new purchases. Structure and inheritance planning need to be refreshed and considered for existing portfolios.
Let’s kick things off with a detailed examination of the Budget’s impacts on landlords:
New Stamp Duty Rules
Since October 31st, landlords have faced a steeper bill when buying properties. The additional Stamp Duty Land Tax surcharge increased from 3% to 5%, raising purchase costs.
On a £300,000 property, your clients now pay £17,500 in stamp duty – £6,000 more than under previous rates.
However, there’s an even bigger change afoot. From April 1st, just six weeks away, the nil-rate threshold drops from £250,000 to £125,000. That same £300,000 property purchase will then attract £20,000 in stamp duty. The calculation breaks down as:
- 0% on the first £125,000 = £0
- 2% on the next £125,000 = £2,500
- 5% on the remaining £50,000 = £2,500
- Plus the 5% surcharge on the entire £300,000 = £15,000 Total: £20,000
Right now, estate agents are in a hurry to get transactions through by April. With mortgage rates continuing to fall, several major lenders are offering buy-to-let rates below 4.5%. However, clients should be made aware that rushing property purchases carries its own risks.
Company Structure Changes
Corporation Tax remains steady at 25%, but April 2025 brings important changes to National Insurance (NI).
Property companies employing management teams, maintenance staff, or other employees will see their NI contributions rise from 13.8% to 15% on earnings above £5,000. To help offset this, the Employment Allowance (EA) doubles to £10,500, and more companies can now benefit as the eligibility threshold is abolished.
The enhanced EA also affects tax planning for limited company directors, who may now have greater flexibility in structuring their remuneration. With the allowance increasing, companies that qualify can offset a larger portion of their employer NI liability, making it more tax-efficient to pay a higher salary rather than relying primarily on dividends.
What’s striking here is how variable the impacts are likely to be. Larger portfolio companies with in-house teams will likely face the brunt of increased employment costs from the NI hike, though the enhanced EA helps in many cases.
Meanwhile, many landlord companies operating purely as investment vehicles – with few or no employees – remain primarily unaffected by the NI rise.
They continue to retain a limited company’s tax advantages on mortgage interest and profit extraction while also benefiting from the enhanced EA. In some cases, incorporating will be more tax-efficient than pre-Budget.
Inheritance and Pension Planning
April 2027 will change how property wealth transfers between generations – which has proved one of the Budget’s more controversial policies.
For the first time, pensions will fall within inheritance tax calculations. This coincides with changes to Business Property Relief from April 2026, where only the first £1 million of qualifying assets receive 100% relief.
Landlord clients planning to pass their accumulated property wealth to their descendants will often need to analyse and optimise their inheritance planning. Some key points to examine:
- Review any clients with estates over £325,000 – the frozen nil-rate band means more estates will face IHT as property values rise
- Consider moving property into pensions before April 2027, when pension funds become subject to IHT
- For larger portfolios over £1 million, Family Investment Companies might offer better relief than direct property ownership
- Look at spousal property transfers, as these remain exempt and could help maximise the use of both partners’ nil-rate bands
For clients operating through companies, these changes require rigorous cost-benefit analysis. There will likely be a sweet spot for every client in terms of both strategy and the timing of decisions.
Making Tax Digital Requirements (MTD)
The government has confirmed the timelines for MTD for landlords. Those earning over £50,000 must comply from April 2026, with a staged rollout for earnings over £30,000 from April 2027.
Most recently, Reeves announced plans to include those earning over £20,000 by the end of Parliament. Many of your landlord clients need to start preparing now.
They’ll need:
- Proper digital record-keeping systems
- Compatible, compliant software for quarterly updates
- New digital processes for tracking property income and expenses
- To deliver regular real-time income reporting rather than annual returns
This will be a massive change for some used to spreadsheets or classic pen-and-paper bookkeeping. Adopting MTD-compliant accounting software sooner rather than later can give clients an edge in the present while preparing them for when it becomes mandatory.
Read the full Guide to MTD for IT here
How Accountants Can Adapt Their Landlord Client Strategies
The only constant in tax is change – and the Autumn Budget brings plenty. Different landlords face different consequences from these updates.
Landlords with smaller portfolios employing staff might benefit from the EA changes, while a larger operator might sustain significant cost increases from the new NI rates.
When reviewing client structures, consider:
- Current income needs versus future wealth planning
- Appetite and ability for portfolio growth
- Family succession and inheritance intentions
- Current borrowing and refinancing options
- Day-to-day management requirements and costs
The bottom line? The Budget brings forth changes that affect most landlords, though the impacts vary widely. Now is the time to reassess structures, review succession plans, and prepare for mass MTD rollout.
Implementing Software & Digital Tools for Landlord Tax Planning
While the MTD rollout for landlords from 2026 might feel like just another compliance obligation, it presents a genuine opportunity to transform how landlords manage their finances and how we support them.
Digital systems don’t just satisfy HMRC’s requirements – they give landlords precise control over their property finances while streamlining tax reporting.
Platforms like Landlord Studio, for example, offer comprehensive features designed specifically for property investors:
- Detailed income and expense tracking per property
- Instant profit and loss reporting by property or portfolio
- Full MTD compliance and direct HMRC filing
- Tax planning tools and calculations
- Secure storage for receipts, statements, and contracts
Waiting for the deadline carries risk, so clients can be encouraged to get ahead of time.
That way, they can master the software at their own pace, establish proper digital records, and take advantage of better financial data.
Next Steps
So what are some action points to take away right now? With several key deadlines on the horizon, developing an action plan will help both you and your clients adapt to changes successfully.
Start by identifying your priority clients – those with immediate decisions ahead:
- Anyone planning property purchases before April’s stamp duty changes
- Landlords earning over £50,000 who’ll need MTD preparation from 2026, and those with £30,000 in 2027 and £20,000 thereafter
- Property companies that need to review their structure before April’s NI changes
- Clients whose inheritance plans need updating before 2026
Consider scheduling urgent reviews with priority clients before tax year end, particularly those planning property transactions. At the same time, establish a clear timeline for getting clients ready for MTD.
Landlord Studio offers an ideal starting point. Its property-specific features and MTD compliance help smooth the transition to digital accounting. Getting the ball rolling now will allow time to implement proper solutions instead of rushing last-minute fixes.
Learn more about Landlord Studio for Accountants: Partner Program.
