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As we head towards a new tax year, as in many previous periods, property business owners, buy-to-let investors, and commercial real estate companies face a new range of reforms, tax rises and changes to exemptions – all of which mean that preparedness is key to managing the impacts.
Our UK property accountants have decades of expertise and frequently reiterate that your accountancy team isn’t solely there to manage routine tasks like VAT returns, self-assessment tax return submissions and Capital Gains Tax.
Instead, our role is to offer professional guidance, input, advisory assistance and tailored support, ensuring your property business can stay compliant, manage tax increases smoothly, forecast your revenues and profitability, and remain ahead of changes that could otherwise be disruptive.
Recapping the Changes to UK Tax Legislation Affecting Property Businesses From April 2025
All landlords and buy-to-let investors will appreciate that reforms to tax allowances, changes to exemptions, and the introduction of new tax levies can have considerable impacts. Advance planning is an essential aspect of remaining in full control of their businesses, profitability and future tax liabilities.
From April 2025, there are varied changes to be conscious of, some of which apply primarily to commercial property owners and others more relevant to private and sole trading landlords and investors – but all of which could have an effect on your property acquisition, sale or investment plans.
Below, we’ve summarised some of the key reforms taking effect this year that we have been advising our property sector clients on to ensure they have relevant plans or measures in place to manage.
Increases to Buy-to-Let Stamp Duty Surcharges
Stamp Duty Land Tax will revert to the levies charged prior to September 2022, following an increase to the buy-to-let surcharge, which rose from 3% to 5% in the Autumn Budget last year. Stamp duty rates from April will start at 5% of the property or lease premium on values up to £125,000, with a top-rated 17% for remaining values over £1.5 million.
Reduced Capital Allowances for Furnished Holiday Lets
Last year’s Spring Budget saw the end of the Furnished Holiday Lettings (FHL) scheme, which will take effect from 6th April 2025 with the loss of tax benefits related to Business Asset Disposal Relief (BADR) and mortgage interest relief – with Capital Gains Tax (CGT) applied at the standard 24% rate.
FHL profits won’t be treated as relevant earnings for pension contribution tax relief purposes and, from this new tax year, joint owners will need to submit a document called Form 17 to HMRC if their ownership split isn’t equal, with a 60-day deadline to avoid ownership being registered as 50/50.
Income and Corporation Tax on Property Businesses
For self-employed property owners, the personal allowance, tax bands and rates remain frozen, which could impact their tax liabilities if their business has expanded and their income has tipped into a higher bracket.
Corporation Tax similarly remains unchanged from April, with a 19% small profits rate for companies with profits of £50,000 or less and a 25% charge for those with profits above £250,000.
However, any businesses trading in the property space with employees will inevitably be conscious of the rises to employer’s National Insurance Contributions (NICs), which will increase from 13.8% to 15%, coupled with lower thresholds at which secondary contributions become payable.
Managing Your Tax Obligations With Support From Our Experienced UK Property Accountants
Another relevant aspect of tax management for property professionals, albeit not something that is just being introduced at the start of the new tax year, is the potential need to submit an Annual Tax on Enveloped Dwellings (ATED) return.
This applies where companies hold property assets intended for residential use, valued at over £500,000, and that are not being held for the purposes of a sale or development. Given the higher regional average property values, a larger proportion of professional investors and landlords in the southeast are required to submit a declaration and pay the arising charge.
Commercial owners of residential properties may be subject to this annual levy, reliefs notwithstanding, if their real estate assets exceed the taxable value, which is reassessed every five years. The valuation date from the 2023/24 tax year until 2027/28 is based on the property value as of 1st April 2022 or the purchase cost if acquired after then.
For the 2025/26 tax year, the annual charge equates to:
- £4,450 for properties valued at between £500,000 and up to £1 million
- £9,150 for real estate assets worth between £1 million and £2 million
- £31,050 for properties worth over £2 million and up to £5 million
Understanding this and other tax obligations linked to your portfolio is essential. It ensures you are fully compliant, can plan and budget accurately, and are not exposed to potential mis-filings or omissions, even inadvertent, which can have serious repercussions.
As a property-specific taxation, the ATED rules illustrate why advisory support from specialists in property tax management is so important. This and other more niche taxation rules are often missed by otherwise capable accountancy teams that lack proficient knowledge and in-depth awareness of the property tax landscape.
The Advantage of Tailored, Independent Advice for Property Businesses in the UK
As we’ve noted, working with a property tax specialist ensures you make confident judgements about the right strategic decisions for your business, have comprehensive knowledge about the tax and accounting implications and avoid any errors or omissions that could result in a sizable tax bill.
Our advice for all buy-to-let landlords, property investors, and real estate professionals is to speak with the James Todd & Co team, whether you are concerned about your changing tax position or need clarity over how your tax burden may change with the start of the new tax period.
With teams based across our three locations in Chichester, Fareham and Southsea, we are on hand to review and assess your tax affairs, advise if there are allowances or schemes that you may benefit from, and ensure you have complete oversight of your property portfolio and the tax obligations you can expect.
If you need any further information about the reforms and changes we’ve summarised here, taxation advice, or help planning your budgets and cash flow projections for the year ahead, you are welcome to get in touch.