Chancellor John Healey will leave Capital Gains Tax rates unchanged in next week’s Budget, sparing landlords a potential £15,633 increase on a typical ten-year property gain.
The Times and the Financial Times report that Healey has rejected calls to raise CGT or align it with income tax. New analysis from Chris Mason, head of client operations at The Letting Partnership, puts the saving in concrete terms: aligning CGT with income tax would have lifted a higher-rate landlord’s bill by two thirds.
Landlords weighing a sale before year end now have one less tax risk to price in. The Budget on 28 October still leaves rental income tax rises from April 2027 and Making Tax Digital on the table, but an immediate CGT increase looks off the agenda.
What the numbers show for landlords
The Letting Partnership tracked the average British home from £198,169 in July 2016 to £272,611 in July 2026, a gain of £74,442. Under current rules a higher-rate taxpayer would face an illustrative CGT bill of £17,866 at 24 percent, before allowances.
Had CGT been aligned with income tax, that bill would have risen to £29,777 at 40 percent, an extra £11,911 or 66.7 percent. For additional-rate taxpayers the bill would have climbed to £33,499 at 45 percent, an extra £15,633 or 87.5 percent. Basic-rate taxpayers would have paid £14,888 instead of £13,400, an extra £1,488.
Mason said the figures show why sale timing matters so much for portfolio planning at present, with borrowing costs and reform costs already squeezing margins.
Budget still holds risks beyond CGT
The decision removes one threat but leaves others in place. Separate rental income tax rates rise by two percentage points from April 2027, while Making Tax Digital requirements continue to expand for landlords with rental income.
This follows Landlord Knowledge’s report on the NRLA’s call for CGT on real gains only, which found just one fifth of house price growth between 2015 and 2024 reflected real terms gains once inflation was stripped out. The association argued taxing the full nominal gain penalises long-term holders who have simply tracked inflation.
Ministers have also faced warnings that higher CGT could backfire. HM Revenue and Customs has estimated that raising the higher CGT rate by ten points could cut receipts by £3.6 billion in 2028-29 as investors delay sales or leave the country. That behavioural response was central to Treasury caution, according to reports.
The wider sales backdrop remains fragile. HMRC data showing CGT receipts jumped 77 percent as landlord exit costs bite underlines how many owners are already crystallising gains despite the tax take. Agents report a stock overhang in southern England, with many ex-rental flats unsold after six months.
Landlords should check the official rules on reporting and paying Capital Gains Tax on property before exchanging, including the 60-day deadline for UK residential disposals.
What this means for landlords
- If you plan to sell this tax year: current CGT rates of 18 percent and 24 percent on residential gains still apply, subject to allowances and the 60-day reporting rule.
- Watch for: the Budget on 28 October for stamp duty, rental income tax detail and any relief changes, plus April 2027 income tax changes.
- Bottom line: a sale is £11,911 to £15,633 cheaper in CGT than under the alignment idea, but other Budget and RRA costs still shape the maths.
Editor’s view
Holding CGT steady is sensible damage limitation, not a giveaway. Landlords still face higher income tax on rents from 2027 and heavy compliance costs from renting reform. Anyone on the fence about selling should run the full numbers now rather than wait for the next rumour.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 21 October 2026
Sources: The Letting Partnership, HM Revenue and Customs, HM Treasury Budget reporting via The Times and Financial Times
Related reading: NRLA calls for CGT on real landlord gains before Budget
