Tax and Regulation Changes All Landlords Need to Know

The UK property landscape is evolving, and with each new tax year, landlords face a wave of legislation and tax updates that can impact their income, responsibilities, and long-term strategies. Staying on top of these changes is essential—not only to remain compliant but also to protect your investment.

[edit] 1. Changes to Capital Gains Tax (CGT)

In April 2024, the Capital Gains Tax annual exempt amount was slashed from £6,000 to £3,000. For landlords planning to sell rental properties, this significantly increases potential tax liabilities. The lower exemption means more gains are now taxable, cutting into profits if not planned for.

Tip: Consider selling in a tax-efficient way or spreading disposals over multiple years.

[edit] 2. Energy Performance Certificate (EPC) Regulations

The government has proposed plans to raise the minimum EPC rating to C for all rental properties. Although timelines are under review, landlords should act now to improve energy efficiency. Non-compliance could mean heavy fines and void periods if your property cannot legally be let.

Suggested upgrades:

• Install insulation
• Upgrade to double glazing
• Switch to energy-efficient heating

[edit] 3. Mortgage Interest Relief

Since April 2020, landlords can no longer deduct mortgage interest costs from rental income. Instead, they now receive a 20% basic rate tax credit. Higher-rate taxpayers, in particular, face greater tax bills.

To navigate this, many landlords are considering setting up limited companies, where mortgage interest remains deductible as a business expense.

[edit] 4. Making Tax Digital (MTD)

From April 2026, landlords with annual income over £50,000 must comply with Making Tax Digital for Income Tax Self Assessment (ITSA). This will extend to those earning over £30,000 in 2027.

Landlords will be required to:

• Keep digital records
• Submit quarterly income and expense updates
• File a final declaration annually

Failing to prepare for MTD could lead to penalties. Begin exploring accounting software or consider outsourcing to a tax specialist.

[edit] 5. Renters Reform Bill

The long-anticipated Renters Reform Bill is expected to abolish Section 21 “no fault” evictions and strengthen tenants' rights. While the full impact is still being debated, landlords must be ready for a shift in the balance of power toward tenants.

What you can do now:

• Review your tenancy agreements
• Familiarize yourself with Section 8 grounds for possession
• Maintain thorough tenant records and documentation

[edit] 6. Licensing and Local Authority Compliance

More councils are adopting selective licensing schemes, requiring landlords to register properties in designated areas. Failing to obtain a license can lead to hefty fines and repayment of rent.

Action step: Always check with your local authority if a new scheme is being introduced in your borough.

[edit] Get Expert Advice Today

Tax and regulatory landscapes are constantly shifting. Rather than navigating these changes alone, speak to a specialist for tailored guidance on your portfolio.

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Whether you’re a first-time landlord or manage a large portfolio, our expert consultants at PHS can help you reduce liabilities, stay compliant, and protect your profits.