From 6‌‌‌ April‌‌‌ 2027, the government will create separate tax rates for property income on Unincorporated landlords.

The income tax rates for property income will be 22% for basic rate, 42% for higher rate and 47% for additional rate.

Finance costs, such as mortgage interest, will be relieved at 22% as a tax credit. The existing £1,000 property allowance and the rent a room relief will remain.

The government is also trying to engage with the devolved governments of Scotland and Wales to provide them with the ability to set property income rates in line with their current income tax powers in their fiscal frameworks.