Owning, letting, selling or passing on a property in the UK rarely touches just one tax. A single buy-to-let can bring Stamp Duty Land Tax on the way in, income tax on the rent along the way, Capital Gains Tax on the way out, and Inheritance Tax if it is still on your books when you die. The rules for all four have moved in the last two years, and a fifth set of digital reporting requirements is now landing for landlords too. Getting property tax services right is less about knowing one rule well and more about seeing how the rules interact.

This guide sets out where things stand for 2026/27, and where a firm such as Tax Consultant earns its fee by joining the dots between them.

Stamp Duty Land Tax on Purchase

Stamp Duty Land Tax (SDLT) is charged on completion of a residential property purchase in England and Northern Ireland. Scotland and Wales run their own equivalents, Land and Buildings Transaction Tax and Land Transaction Tax respectively. SDLT is banded, so each slice of the price is taxed at its own rate rather than the whole price being taxed at the top rate.

Standard SDLT rates, main residence purchases:

Portion of price Rate
Up to £125,000 0%
£125,001 – £250,000 2%
£250,001 – £925,000 5%
£925,001 – £1,500,000 10%
Above £1,500,000 12%

First-time buyers keep a more generous nil-rate band: 0% up to £300,000, then 5% on the slice between £300,001 and £500,000. Above £500,000, the relief drops away entirely and standard rates apply to the whole price. Anyone buying an additional residential property — a second home or a buy-to-let — pays a further 5 percentage points on top of every band, so the entry rate on a second property starts at 5% rather than 0%.

A buyer replacing their main home sometimes ends up paying the surcharge by accident, because the sale of their old home hasn't yet completed. SDLT rules allow a refund if the previous main residence is sold within three years, but the claim has to be made — HMRC will not chase it for you.

Capital Gains Tax When a Property Is Sold or Gifted

Selling a home you have lived in throughout your ownership is normally free of Capital Gains Tax (CGT) under Private Residence Relief. Second homes, buy-to-lets, and inherited property that isn't your main residence do not get that protection, and gains on them have been taxed at 18% within your basic-rate band and 24% above it since the rate was cut from 28% in the Autumn 2024 Budget. Everyone gets a £3,000 annual exempt amount to set against gains each tax year before any tax is due.

UK residents who owe CGT on a residential property disposal must report and pay within 60 days of completion, through a separate online return rather than waiting for Self Assessment. Missing that window brings an automatic penalty on top of the tax itself, which is one of the more common ways property owners end up paying more than they need to.

Worked example: A landlord sells a buy-to-let for a £50,000 gain and pays tax at the higher rate. After the £3,000 exempt amount, £47,000 is taxable at 24%, giving a bill of £11,280, due within 60 days of the sale completing.

Income Tax on Rental Profits, and the New Digital Rules

Rental profit is taxed as income at your normal rate of income tax, after deducting allowable running costs. Mortgage interest on residential lets no longer reduces taxable profit directly; instead it is given back as a flat 20% tax credit, which costs higher-rate landlords more than it used to and is one of the main reasons landlords review whether to hold property personally or through a company.

Since 6 April 2026, landlords and sole traders with gross qualifying income over £50,000 from property and self-employment combined have had to leave annual Self Assessment behind for property income and move to Making Tax Digital for Income Tax: digital record-keeping plus a quarterly update to HMRC through approved software, followed by a final year-end declaration. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028, drawing many more landlords into scope over the next two years. The test is based on gross rental receipts before expenses, and joint owners are assessed on their own share of the income, so it is worth checking your position even if the headline rent on a property looks well above the threshold.

Annual Tax on Enveloped Dwellings, for Companies

Where a UK residential property worth more than £500,000 is held inside a company, partnership with a corporate member, or collective investment scheme, an annual ATED charge applies on top of everything else, based on the property's value band. Several reliefs bring the charge to nil for genuine letting or trading businesses, but a return still has to be filed to claim them.

ATED charges, 1 April 2026 – 31 March 2027:

Property value Annual charge
£500,000 – £1 million £4,600
£1 million – £2 million £9,450
£2 million – £5 million £32,200
£5 million – £10 million £75,450
£10 million – £20 million £151,450
Above £20 million £303,450

Returns and payment for a property held on 1 April fall due between 1 and 30 April, and a fresh acquisition mid-year must be returned within 30 days. The penalty for a late return runs to hundreds of pounds even where the relief means no tax is actually owed, so the filing itself matters as much as the number on it.

Inheritance Tax and the Family Home

Property is frequently the largest single asset in a UK estate, and the thresholds around it have not kept pace with house prices. The standard nil-rate band has sat at £325,000 since 2009 and is now frozen until 5 April 2031. A further residence nil-rate band of up to £175,000 is available when a main home passes to children or grandchildren, taking a typical individual's tax-free threshold to £500,000, or £1 million for a married couple with both allowances intact. Anything above the available thresholds is taxed at 40%.

Landlords with a portfolio of several properties, or families holding one high-value home, often have more room to plan than they realise — through lifetime gifting, trusts, or a change in how a property is owned — provided the planning starts well before it becomes urgent.

Where Tax Consultant Fits In

One adviser, the whole picture. Tax Consultant works with landlords, homeowners, property investors and family estates across the full range of property taxes covered above, rather than treating each transaction as a one-off. That means an SDLT position checked before a purchase completes, a 60-day CGT return filed on time when a property is sold, rental accounts kept in a format that is already compliant with Making Tax Digital for Income Tax, and ATED returns handled correctly where property sits inside a company.

Because these taxes interact, a decision made for one can create a cost in another — moving a portfolio into a company, for instance, can ease income tax pressure while creating an ATED and CGT position that needs managing in its own right. Tax Consultant looks at the ownership structure as a whole before recommending a change, and stays involved through the reporting deadlines that follow it.

Choosing a Property Tax Adviser

Property tax rules change most years, and the last two Budgets have moved SDLT bands, cut the CGT rate, and introduced quarterly digital reporting in quick succession. A good property tax adviser keeps pace with that on your behalf, flags a filing deadline before it is missed, and is honest about where a saving is genuinely available and where it is not worth the risk. Tax Consultant offers that as an ongoing relationship rather than a once-a-year phone call, so a query about a sale, a new purchase, or a letter from HMRC gets an answer from someone who already knows the property in question.

Talk to Tax Consultant about your property. Whether you are buying your first buy-to-let, selling a second home, bringing a portfolio into a company, or simply want your rental accounts ready for Making Tax Digital, Tax Consultant can review your position and set out the practical next step.

Frequently Asked Questions

1. Do I have to pay tax when I sell a second home or buy-to-let?
Usually, yes. Unless the property has been your only or main home throughout your ownership, any gain on sale is normally subject to Capital Gains Tax at 18% or 24% depending on your income, after your £3,000 annual exempt amount. UK residents must report and pay within 60 days of the sale completing, so it is worth involving an adviser before you exchange contracts rather than after.

2. How much Stamp Duty will I pay on a second home?
You pay the standard SDLT bands plus a 5 percentage point surcharge on the whole price, so the first £125,000 is taxed at 5% rather than 0%, rising through the bands from there. If you are replacing your main home rather than adding a second property, you may be able to reclaim the surcharge once your previous home is sold, provided this happens within three years.

3. What is Making Tax Digital for Income Tax, and does it affect me as a landlord?
It is HMRC's move away from a single annual tax return towards digital record-keeping and quarterly updates submitted through approved software. It has applied since 6 April 2026 to landlords and sole traders with gross property and self-employment income over £50,000, falling to £30,000 in April 2027 and £20,000 in April 2028. The threshold is based on gross rent before expenses, so it is worth checking even if your net profit looks modest.

4. Do I need to complete a Self Assessment return if I rent out a property?
In most cases, yes, if your rental income is more than £1,000 a year before expenses, even where you make a loss or the income falls below the Making Tax Digital threshold. Once your income moves above the relevant Making Tax Digital threshold, quarterly digital updates replace the single annual return for that income.

5. Can Tax Consultant help reduce my property tax bill legally?
Tax Consultant reviews how a property is bought, held, let and eventually sold or passed on, and identifies the reliefs and structuring options that genuinely apply to your circumstances, from Private Residence Relief and the SDLT refund on a replaced main home to ownership structures that suit a growing portfolio. The aim is always a position that stands up to HMRC scrutiny, not an aggressive scheme that creates a bigger problem later.