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What does the 2025 Autumn Budget mean for you?
2 min read
December 1, 2025
In this update, we’ll break down the key Property related measures and what they mean for you.
In her first Budget last year, Reeves focused on repairing the public finances, introducing tax rises to plug a reported £22 billion shortfall. This time, she faced an even tougher backdrop. The result: a package of tax increases expected to raise around £26 billion by 2029/30.
What’s striking is how many of the forecasts and rumours failed to materialise. Now that the details are clear, it’s essential to understand the changes and how they could shape your finances in the years ahead.
Tax thresholds frozen until 2031
Tax thresholds will remain frozen until 2031, which has significant implications for clients holding investment properties in their personal names.
Lenders calculate borrowing capacity using their individual Interest Cover Ratio (ICR), which is based on the borrower’s personal tax status (standard or higher rate).
With wages continuing to rise while thresholds stay fixed, more clients will inevitably be pushed into the higher-rate tax bracket. This shift reduces affordability, as borrowing is assessed under the higher-rate stress test, ultimately limiting the amount clients can borrow.
Property and savings
From April 2027, the rate of tax on property and savings income will increase by two percentage points across all tax bands to 22%, 42%, and 47% respectively. Check to see if holding your property in your personal name is still the best long term plan – speak to our colleagues at Thickbroom Chartered Accountants to get expert tax advice.
Mansion Tax
The Chancellor has introduced a new “mansion tax” that will apply to the highest-value homes in the UK.
- This surcharge will be added on top of your usual Council Tax.
- Properties valued between £2 million and £2.5 million will face an extra £2,500 per year.
- For homes worth more than £5 million, the charge rises to £7,500 annually.
- The government expects this measure to raise £400 million by 2031.
What this means for you: If your property falls into one of these bands, you’ll see an increase in your annual tax bill. It’s important to factor this into your budgeting and long-term planning.
If you would like bespoke guidance on what the Autumn Budget means for you, get in touch with us today.
Source: CP 1439 – Office for Budget Responsibility – Economic and fiscal outlook – November 2025
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