Budget 2026: what it means for flat owners, landlords and the blocks they run

What happened

The Chancellor delivered Budget 2026 on 28 October. Four measures touch people who own, let or run flats.

1. Tax on rental income. HMRC’s measure, published on 29 October, sets the property basic rate at 24%, the property higher rate at 44% and the property additional rate at 49% from 6 April 2027. Budget 2025 had already announced separate property income rates from that date; this Budget adds a further two percentage points. The Budget speech said there is “no change to tax on income from dividends and no change to tax on income from employment”. This is announced but not yet in force.
2. 0% VAT on household electricity. The temporary zero rate that started on 1 October 2026 now runs to 30 June 2027 in Great Britain, according to HMRC’s VAT Notice 701/19. This is in force.
3. £100 Household Energy Payment. Up to 20 million households in England in council tax bands A to D will get £100 from January 2027. If you pay council tax by direct debit you should not need to apply. Second homes and empty properties do not qualify. Scotland, Wales and Northern Ireland get funding to decide their own support.
4. Gas standing charges. The government has asked Ofgem to remove standing charges from household gas bills “in 2027 or as soon as possible after”. The costs move onto the unit rate. This is a proposal: Ofgem has not yet set the rules.

What it means for your building

For leaseholders who let their flat. From April 2027, rental profit taxed at the basic rate goes from 20% to 24%. As an illustration, a flat let for £12,000 a year with £4,000 of allowable costs leaves £8,000 of profit; at the basic rate the tax rises from £1,600 to £1,920, an extra £320 a year. Your figures depend on your own costs and tax position. Landlords in England also face the new rental property register from December 2026, which we explain separately.

For the block company. The VAT extension matters most. Shared electricity for lights and lifts in a residential block may qualify for the domestic rate, which is now 0%, even when the account is in the company’s name. We explain how to check your bills in our separate story.

For residents. The £100 payment goes to the council tax payer in England, not to the block. Gas standing charges are charged per household account, so flats with their own gas meters may see a change in 2027; a block with a communal boiler on a business contract should not assume the change applies, as the announcement refers to household gas bills.

What to do now

• If you let a flat, tell your accountant about the April 2027 rates when you plan for the 2027 to 2028 tax year.
• Directors: check the VAT rate on the company’s communal electricity bills and put 30 June 2027 in the budget as the date the zero rate is due to end.
• If your block has a communal gas boiler, note that the standing charge change has been announced for household bills only, and watch for Ofgem’s consultation.

This is general information about the Budget, not tax or financial advice. Ask an accountant about your own position.

How Freeholdpilot helps

Freeholdpilot’s directors’ portal keeps the service charge budget, supplier contracts and bills together, and its compliance calendar holds dates such as the end of the VAT zero rate so the board can plan the next year’s budget.