📢Upcoming Property Tax Changes Every Landlord Should Know

For landlords in the UK, staying ahead of the latest property tax changes is vital. Tax rules are becoming increasingly complex, and even small mistakes can result in penalties, higher bills, or missed opportunities to save money. Whether you own one buy-to-let or manage a portfolio, here are the key updates and deadlines to keep on your radar for 2025:

🔹 Capital Gains Tax (CGT) – Reporting and Payment

If you decide to sell a residential property that isn’t your main home, you must report and pay Capital Gains Tax within 60 days of completion. This rule, introduced in 2020 and extended to 60 days in 2021, continues into 2025.

• Why it matters for small landlords: If you sell a rental property in UK you can no longer wait until your annual tax return. Instead, you must calculate the gain, submit a return, and pay the tax within two months of selling. Missing the deadline leads to automatic penalties and interest charges.
  

• Tip: Keep detailed records of purchase costs, renovation expenses, and selling fees – these can reduce your taxable gain significantly.
  

🔹 Mortgage Interest Relief

Landlords can no longer deduct their mortgage interest from rental income to reduce tax bills. Instead, they receive a 20% basic rate tax credit.

• Impact: If you are a higher-rate taxpayer, you may face larger tax liabilities than expected, particularly if mortgage rates rise.
  

• Example: A landlord earning £12,000 in rental income with £6,000 mortgage interest can no longer offset the full amount. Instead, they’ll pay tax on the full £12,000 and only receive a 20% credit on the £6,000 interest.
  

🔹 Furnished Holiday Lets (FHLs) – Possible Changes Ahead

If you rent out a short-term holiday property (through platforms such as Airbnb or Booking.com), you may currently benefit from additional tax reliefs, such as:

• Capital allowances on furniture and equipment

• Relief on mortgage interest

• More generous pension contributions linked to FHL income
  

However, there are discussions about reducing or removing these reliefs in the near future to bring FHLs in line with standard buy-to-lets.

• What to do: Keep an eye on announcements from HMRC. If you’re planning to invest in or expand holiday lets, factor in that these tax advantages may not last.
  

🔹 Self-Assessment Deadlines

All landlords must declare rental income, even from just one property. The key date is the 31 January 2025 deadline for online filing and tax payment for the 2023/24 tax year.

• Practical example: If you let out a single flat in Birmingham and earn £9,000 in rental income (minus allowable expenses), this must be reported by January. Missing the deadline can mean a £100 fine, plus further daily penalties if the delay continues.
  

🔹 Making Tax Digital (MTD) for Income Tax

MTD for Income Tax Self-Assessment is being phased in. Landlords with income over £50,000 will need to keep digital records and submit quarterly returns to HMRC from April 2026. Those earning over £30,000 will follow in April 2027.

• Why it matters now: It’s worth moving to digital record-keeping (using software like Xero, QuickBooks, or FreeAgent) well before the deadline. This will save time, reduce errors, and help avoid last-minute stress.
  

✅ Key Takeaways for Landlords

• Act early: Keep receipts, records, and income details organised for smoother filing.

• Budget for tax: Set aside a portion of your rental income monthly to avoid surprises.

• Seek advice: Even small landlords can benefit from professional tax advice – often the savings outweigh the cost.

• Stay informed: Tax rules are changing quickly, especially for property investors and landlords.
  

💡 Final Thought: The government’s focus on tightening landlord taxation means planning ahead is more important than ever. Whether you manage a single buy-to-let or multiple holiday lets, understanding these UK property tax changes for 2025 will help you protect your rental income, remain compliant, and make smarter investment decisions.

👉 For tailored landlord advice and updates, contact us: 📱+44 7845 025299

📧 info@avhughesproperties.com