The Autumn Budget 2025 is set to be one of the most closely watched for the UK property sector in years. With refinancing pressures building, valuations softening and development viability already under strain, even modest tax adjustments could reshape market behaviour.
What the Market Is Expecting?
SDLT Reform
Speculation includes a seller-side levy, new thresholds to improve mobility, and bringing more corporate structures into charge. SDLT remains the most politically deliverable reform area.
High-Value Residential Charges / Mansion Tax
Ideas range from an annual levy to limiting reliefs for premium homes. Any such measure would influence GDVs, liquidity and prime sales rates.
National Insurance on Rental Income
A new NI-style charge on rental income is being discussed. Models range from a full levy to phased or threshold-based approaches. This would increase holding costs and pressure ICRs for leveraged landlords.
CGT Reform
Potential measures include narrowing the gap between CGT and income tax, restricting private residence relief for higher-value properties and revising corporate disposal rules.
SDLT on Share Purchases of Property-Rich Companies
Tightening the rules around SPV share acquisitions is also under consideration to reduce existing arbitrage.
What’s Most Likely to Be Announced?
SDLT: Rebalancing, Not Replacement
Expect targeted changes – seller-side levies at the upper end, mobility incentives at the lower end and anti-avoidance tightening.
A CGT-Based Mansion Tax
More feasible than an annual levy. Likely implemented through reduced private residence relief or higher CGT rates on substantial gains.
NI on Rental Income – Introduced Softly
A phased or threshold-based version is more likely than a full charge, with possible exemptions to avoid destabilising the rented sector.
SDLT Tightening on Property-Rich Companies
One of the most probable reforms, given its simplicity and revenue potential.
Broad CGT Alignment
Full alignment with income tax is unlikely. Expect targeted relief restrictions instead.
Sector-Level Sensitivity Analysis
We expect to see the subsectors experience different intensities:
- Commercial
Already facing structural under-demand, the sector is vulnerable to:- Rising business rates,
- Tighter capital taxes reducing investment appetite, and valuation softening during key refinancing cycles.
- Secondary offices face the highest risk of accelerated distress.
- Retail & Shopping Centres
With tenant affordability stretched and many leases heavily incentivised, additional cost burdens through business rates or energy-linked charges may drive higher vacancy and weaken debt-service coverage.
- Logistics & Industrial
Still fundamentally strong, but highly sensitive to business rates. Even modest rate changes can materially influence occupational decisions, operating costs and yield expectations.
- Residential Development
A mansion tax or reduced reliefs could affect GDV assumptions for:
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- Prime London schemes,
- High-end regional developments, and
- Mixed-use projects with premium units.
Development finance is acutely sensitive to exit valuations, meaning lender appetite and contingency demands may shift quickly.
In Summary
The Autumn Budget 2025 may not rewrite the UK property tax system, but several targeted reforms are likely to exert cumulative pressure on valuations, liquidity, development viability and long-term ownership structures.
For lenders we expect to see:
- valuation pressure, especially on prime and SPV-held assets,
- longer sales periods if seller-side levies reduce liquidity,
- increased refinancing risk where rental income is impacted, and
- more requests for covenant resets or extended amortisation.
Early segmentation of exposures – high-value residential, SPVs, rental income will be key.
