Legal News | 27.11.25

Autumn Budget 2025 – The Tax Impact for Commercial Property

Remarkably, considering the unprecedented speculation as to potential changes, there were few unpleasant surprises for commercial property in yesterday’s budget.

Stamp Duty Land Tax

The non-residential SDLT rates remain unchanged.

The rules for “mixed” property comprising both residential and non-residential elements, remain unchanged.

Increase in Rates for Individual Landlords 

From April 2027, individual landlords must pay an additional 2% of Income Tax on their property income whether they are a basic tax payer, a higher rate tax payer or an additional tax payer.

The rationale being to narrow the gap between tax rates on earned income and passive income.

Some further listing of buy to rent properties for sale may follow in consequence.

High Value Council Tax Surcharge (HVCTS)

This rumoured “mansion tax” will commence from 5 April 2028 to English residential properties valued at £2M or more.

The charge to start at £2,500 per annum rising to £7,500 for homes valued above £5M payable by the owner (not occupier).

The exact bands between £2M and £5M are yet to be set out as is the basis for valuing properties.

A government consultation in early 2026 will consider reliefs and exemptions as well as its application to residential properties held through SPVs.

Business Rates

The Government is to introduce a higher rate on properties with a rateable value of at least £500,000, representing about 1% of properties.

The Government intends to set the higher rate at 2.8p above the national standard multipliers.

The high value multiplier will be 50.8p in 2026-2027.

This is expected to fund lower tax rates for retail, hospitality and leisure properties in 2026-2027.

Capital Allowances

Full Expensing is not affected.

The main rate of ‘Writing Down Allowances’ for qualifying plant and machinery in commercial property will reduce from 18% to 14% from April 2026.

Also, from April 2026, a new first year allowance at 40% for qualifying expenditure is to be introduced, allowing a larger proportion of upfront costs to be deducted within year one.

If you require any assistance following the budget, or would like to get in touch with a commercial property enquiry, please contact the Commercial Property team at commercialproperty@wansbroughs.com or 01380 733300.