Property income tax rises two points in April 2027. The decision window is now.

From April 2027 the basic, higher and additional rates of income tax applied to property income each rise by two percentage points, taking them to 22%, 42% and 47%. Landlords holding through limited companies are unaffected. Alongside it, the freeze on income tax thresholds runs to 2030/31, quietly pulling more landlords into higher bands each year without any rates ever changing. And from April 2028, a council tax surcharge applies to homes valued above £2 million, costing between £2,500 and £7,500 a year, depending on the property's value.

The direction of travel is not ambiguous

Individually, none of these measures is dramatic. Stacked, they are a clear statement of policy direction: holding property personally is getting steadily more expensive, and holding it through a corporate structure is not. For landlords who have been weighing incorporation for a couple of years without acting, this is the change that makes the sums move. Two percentage points on a higher-rate landlord’s rental income are not trivial, and they compound every year they apply.

But incorporation is not a form you fill in

This is where the conversation usually goes wrong. Moving a portfolio into a limited company is a sale from the individual to the company. That has consequences: stamp duty land tax is generally payable on the transfer, capital gains tax may crystallise on the disposal, and the lender's appetite for the receiving structure is a separate question. Whether it is worth doing depends entirely on the portfolio, the gains sitting in it, the intended holding period and the borrower’s wider tax position. That is an accountant’s judgement, not a brokers, and anyone telling you incorporation is automatically the answer is not being straight with you.

What is a broker question is the finance

Because whatever the tax answer turns out to be, the mechanics run through lending. Existing facilities held personally cannot simply transfer with the property into a company; they must be redeemed and replaced with limited-company buy-to-let facilities. That means new applications, new valuations, new legals and potentially early repayment charges on the facilities being redeemed. On a portfolio of any size, that is a multi-month process even when it goes smoothly, and it rarely goes smoothly across every property at once. Which is why April 2027 is not the deadline. The realistic decision window closes considerably earlier than that.

A working timeline

The other route people forget

Not every response to a tax change is a restructure. For landlords who decide that incorporation is not worth the cost, the question becomes whether the portfolio is generating enough to absorb it and, if not, what changes are needed. That might mean disposing of the weakest-performing stock, or raising capital against equity to improve or convert properties into higher-yielding formats. A second charge can fund that without disturbing a first charge you want to keep. And where a tax liability itself creates a short-term cash flow problem, business and tax finance is usually cheaper than the penalty path. Get in touch if you want to model the options.

This article is general information rather than tax advice. Speak to your accountant about your own position before making structural decisions.