1. Making Tax Digital for Income Tax (MTD ITSA): From 6 April 2026
What Is Changing?
From 6 April 2026, Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) becomes mandatory for unincorporated landlords (those who own property in their own name) whose combined gross rental and self-employment income exceeded £50,000 in the 2024–25 tax year. The threshold drops to £30,000 in April 2027 and £20,000 in April 2028, meaning the vast majority of private landlords will eventually be swept in.
The annual Self-Assessment return you are familiar with is being replaced by a four-part digital reporting cycle:
• Four quarterly updates submitted within one month of each quarter end (7 August, 7 November, 7 February, 7 May).
• An End of Period Statement (EOPS) to finalise your property income figures.
• A Final Declaration by 31 January, which is the equivalent of your current tax return, incorporating all other income sources.
Important note: The threshold is based on gross income (before expenses), not profit. If you jointly own a property 50/50 with a partner, only your share counts towards your threshold. Limited company landlords are not affected, as MTD ITSA applies to individuals only.
How Does It Affect You?
The administrative burden increases significantly. You can no longer leave your records until January and hand them to an accountant. Digital records must be maintained continuously, and submissions must be made quarterly. Penalties will apply for missed deadlines under a points-based system. Paper records and disconnected spreadsheets are now genuinely risky unless linked to MTD-compatible software. The first quarterly deadline for the 2026–27 tax year falls on 7 August 2026, just four months away.
Action Points
✔ Check your threshold now. Review your 2024–25 gross rental and self-employment income (before expenses) to confirm whether you fall into the April 2026 cohort. HMRC plans to send letters out to those who need to adopt MTD between November 2025 and March 2026
✔ If you have not already adopted MTD-compatible software such as Xero, QuickBooks, FreeAgent, Landlord Studio or Hammock, you need to seriously start thinking about adopting one. The mandatory regime begins on 6 April 2026 and your first quarterly submission deadline falls on 7 August 2026. There is no grace period.
✔ Digitise all receipts and records. Start scanning invoices, receipts and bank statements now so that your records are clean and complete before 6 April.
✔ Even if you are below the £50,000 threshold this year, prepare anyway. The threshold drops to £30,000 in April 2027 and £20,000 in April 2028, meaning most landlords will be captured within two years.
2. The Renters' Rights Act: From 1 May 2026
What Is Changing?
The Renters' Rights Act received Royal Assent in October 2025 and its first phase comes into force on 1 May 2026. This is the most fundamental overhaul of England's private rented sector since the Housing Act 1988. The changes are not optional and are not phased in gradually for existing landlords. The date of 1 May 2026 is a hard cliff-edge.
Key changes from 1 May 2026:
• Section 21 'no-fault' evictions are abolished. You will no longer be able to serve a Section 21 notice to remove a tenant. All possession must be sought under Section 8 with a valid, legally-recognised ground.
• All Assured Shorthold Tenancies (ASTs), including those already in existence, automatically convert to Assured Periodic Tenancies (rolling tenancies) at midnight on 30 April 2026.
• Fixed terms become void. Any fixed-term clause in an existing tenancy agreement ceases to have legal effect. Rent review clauses referencing CPI, RPI or any other formula also become null. Landlords may only increase rent using the statutory Section 13 process (Form 4A), and only once every 12 months.
• Rent bidding is banned. You cannot accept offers above the advertised rent, and advance rent is capped at one month.
• Discrimination against benefit claimants and families with children is made illegal.
• Landlords must consider and formally respond to any tenant request to keep a pet.
• A mandatory Private Rented Sector (PRS) Database will require all landlords and properties to be registered, rolling out regionally from late 2026.
• A new Private Rented Sector Ombudsman will provide tenants with a free, independent complaints process. Landlords must join.
• Penalties for non-compliance range up to £7,000 for civil breaches and up to £40,000 for more serious offences.
How Does It Affect You?
The loss of Section 21 fundamentally alters your risk profile as a landlord. Regaining possession of your property will require you to prove a legally valid ground and to do so with proper documentation and correct procedure. The stakes are higher: get the paperwork wrong and you could face significant delays and costs. The good news is that the revised Section 8 grounds do include workable routes for landlords who wish to sell, move in, or recover from genuine rent arrears, but these must be carefully followed.
Action Points
✔ Issue the Government Information Sheet to all existing tenants on or before 31 May 2026. The Government will publish this in March 2026 and you must distribute it to every tenant with a pre-May tenancy.
✔ Audit all tenancy agreements now. Identify any fixed-term clauses, rent review clauses and Section 21 notices currently in progress. Determine the legal position of each tenancy before 1 May.
✔ If you need to regain possession and have a current Section 21 in train, take advice urgently. The window to enforce existing Section 21 notices before abolition is extremely narrow.
✔ Update your tenancy documentation. For any new tenancy created on or after 1 May 2026, you must provide a 'Written Statement of Terms' containing detailed prescribed information. Outdated AST templates will not be compliant.
✔ Register with the PRS Database and Ombudsman as soon as these go live. Non-registration will itself become a ground for penalty.
✔ Take professional legal advice on possession strategy. Understanding the revised Section 8 grounds, including the four-month notice period for selling or moving back in, is now essential risk management.
3. Property Income Tax Rate Increases: From 6 April 2027
What Is Changing?
The Autumn Budget 2025 introduced a major structural shift in how rental income is taxed. From 6 April 2027, property income will be taxed at new, separate and higher rates than general income. Rental profits will attract a 2 percentage point surcharge across all tax bands:andrrent Rate (2025-26)
This compounds with Section 24 (the mortgage interest restriction already in place), the continued freeze on income tax thresholds until 2030–31 (fiscal drag pulling more of your income into higher bands each year), and the abolition of the Furnished Holiday Let regime which came into force in April 2025.
How Does It Affect You?
For a higher-rate taxpayer with £20,000 of rental profit, the 2% increase alone adds £400 per year in tax. Multiply across a portfolio, and the impact is significant. Combined with Section 24, many leveraged landlords, particularly those with mortgaged properties owned personally, will see net yields compress sharply. This makes property structure planning, now more than ever, a priority.
Action Points
✔ Model your net rental yield under the new 2027 rates. Ask us to recalculate your projected tax liability property-by-property under the new bands, taking into account Section 24 restrictions, frozen thresholds and mortgage costs.
✔ Review your property ownership structure. With property income taxed at up to 47% for individuals versus 25% corporation tax, some landlords may benefit from holding properties in a limited company. This is not suitable for everyone, as stamp duty, refinancing costs and extraction tax must all be modelled, but for long-term growing portfolios, the arithmetic can work strongly in favour of incorporation.
✔ Use pension contributions strategically. Making Additional Voluntary Contributions (AVCs) or contributing to a SIPP can reduce your adjusted net income, potentially keeping you in a lower tax band.
✔ Consider the timing of any rental income. If you have flexibility, deferring income into the 2026–27 tax year (taxed at current rates) rather than 2027–28 may be advantageous.
✔ Do not delay. Speak to us now. This planning window is 12 months. Once April 2027 arrives, opportunities to restructure will have narrowed significantly.
4. EPC Minimum Standards: Plan for the 2030 Deadline
What Is Changing?
The Government has confirmed that all privately rented properties in England will be required to achieve a minimum EPC rating of C by October 2030, at a cost cap of £10,000 per property (reduced from the originally proposed £15,000 following the January 2026 Warm Homes Plan consultation). New EPC metrics under a reformed Home Energy Model are expected to be introduced in the second half of 2027 following a further delay announced in March 2026. Currently, approximately 52% of private rented sector properties sit below the required C rating.
How Does It Affect You?
If you hold older stock, particularly Victorian terraces, solid-wall properties or properties without cavity insulation, the cost of compliance could be substantial. Failure to comply will ultimately prevent you from legally letting the property. With trade availability expected to be stretched as the 2030 deadline approaches, those who leave it late will face higher contractor costs and potential void periods during works.
Action Points
✔ Check the current EPC rating of every property in your portfolio. Use the official EPC Register at gov.uk.
✔ Commission an updated energy assessment for any property with an out-of-date or borderline EPC rating, particularly if it is close to the D/C boundary. Do not wait for the new metrics; improvements that work under the current system will very likely work under the reformed one.
✔ Prioritise cost-effective upgrades first: loft insulation (270mm) can improve a rating by 10–15 points; cavity wall insulation (£350–£500) can add 5–10 points; switching to LED lighting provides a smaller but measurable improvement.
✔ Budget the £10,000 cost cap per property into your financial planning for the next four years. Do not assume rents alone will absorb it.
✔ For properties that may be uneconomic to upgrade, consider whether this changes your exit strategy. Selling before the compliance burden falls may, for some properties, be the financially rational decision.
The Bottom Line: Act Now, Not Later
The changes landing between April 2026 and 2028 are not incremental. They are structural. The landlords who will navigate them successfully are those who treat their property portfolios as businesses: organised, compliant, forward-planned and professionally advised. Those who wait for the deadlines to arrive and react will face penalties, higher bills, and far fewer options.
There is still time, but that window is closing fast., the time to act is now.
Disclaimer: This blog post is for general information purposes only and does not constitute personalised tax or legal advice. Tax legislation is subject to change. Readers should seek professional advice tailored to their individual circumstances before taking action. The information is based on law and HMRC guidance as at March 2026.