Navigating April’s Tax Changes 2025: Tips for Buy-to-Let Landlords

Tax changes are coming into play in April 2025. Here is a recap of what Buy-to-let Landlords need to be aware of. 

As April approaches, landlords in the UK need to be aware of various tax changes that may affect their financial obligations. This period brings adjustments that could influence how landlords manage their properties and finances moving forward. 

In this blog post, we will cover the upcoming April tax changes that landlords should prepare for, offering insights to help navigate this evolving landscape. 

April tax changes 2025 recap:

1. Stamp Duty Land Tax  
2. Furnished Holiday lettings (FHLs) 
3. Capital Gains Tax adjustments 
4. Buy-to-Let Income Tax Rates 2025
5. Making Tax Digital update 

If you are unsure how April’s tax changes will affect you, seek professional and independent financial advice. 

1) Stamp Duty tax changes 2025

From 1 April 2025, Stamp Duty Land Tax (SDLT) for Buy-to-Let properties and second homes in England and Northern Ireland will revert to pre-September 2022 levels, meaning higher upfront costs for landlords and investors when purchasing their next rental property. 

This change follows the end of a temporary reduction implemented in 2022 and includes an increased Buy-to-Let surcharge from 3% to 5% following the 2024 Autumn Budget. 

As SDLT is calculated on a tiered basis, with varying tax rates applied to different portions of the property’s value, it’s essential to establish how much Stamp Duty you’ll need to pay based on the latest rises. 

The table below outlines the Buy-to-Let or second home Stamp Duty thresholds from April 2025 in England or Northern Ireland. Rates apply to UK residents only. 

Buy-to-Let Stamp Duty rates from 1 April 2025:

Source: Gov.uk 

For more information, read our Stamp Duty Buy-to-Let Guide. 

2) Furnished Holiday lettings (FHLs) changes 

Following the 2024 Spring Budget, several announcements were made affecting those with a furnished holiday let in their property investment portfolio, including the abolition of the Furnished Holiday Lettings (FHL) regime. 

Several tax benefits have been cut including mortgage interest relief and a loss of Business Asset Disposal Relief (BADR) for Capital Gains Tax (CGT), with a shift to standard 24% residential property CGT rate instead. 

FHLs will no longer qualify for capital allowances, with only replacement domestic item deductions allowed. Pension contribution tax relief will also be affected, as FHL profits will no longer be considered relevant earnings. 

Finally, joint property owners, especially spouses with unequal shares, should seek to submit a Form 17 to HMRC within 60 days of signing after 5 April 2025 to avoid a default 50:50 split. 

If you own a furnished holiday let, you should review your letting activity to determine if it meets FHL criteria and seek professional financial advice before the deadline to minimise any disruptions. 

For more information, follow this link for government advice about FHL tax changes. 

3) Capital Gains Tax Adjustments

Capital gains tax (CGT) adjustments represent another consideration for landlords and investors who are thinking of selling up or offloading property assets in 2025 and beyond. 

Since April 2023, the annual exemption amount for CGT has been reduced from £12,300 to just £3,000, increasing tax liabilities when selling property. 

While the government did cut the CGT rate for residential property for higher earners from 28% to 24% in April 2024, this reduction doesn’t necessarily compensate for the drastic drop in the tax-free allowance. 

For landlords considering putting their property up for sale, it’s crucial to understand how these changes may impact overall returns, as you’ll most likely be liable to pay more CGT when selling properties despite the seemingly lower tax rate. 

4) Buy-to-Let Income Tax Rates 2025

With the next tax year on the horizon, understanding income tax thresholds is crucial for landlords when calculating tax obligations. As the amount you will pay will depend on various factors, you should seek professional advice if you are unsure of your obligations or what bracket you fall into. Here is a recap of Buy-to-Let income tax rates for 2025. 

Personal allowance

You can earn £12,570 before paying any income tax. The government confirmed that his amount is frozen until 2028.

For the 2024-25 and 2025-26 tax years: 

Basic Rate (20%)

For rental income between £12,571 and £50,270, you’ll pay 20% tax.

Higher Rate (40%) 

If your rental profits exceed £50,271, you’ll pay 40% tax on the amount above that threshold.

Additional Rate (45%)

For rental income over £125,001, the tax rate is 45%.

This income tax summary is for informational purposes only. Consult a qualified accountant or tax advisor for personalised advice regarding your specific tax liabilities.

5) Making Tax Digital update 

Finally, although Making Tax Digital (MTD) is on the horizon, changes are not planned to come into play until 2026 at the earliest. So, while the shift to digital tax returns is coming, you have some time to prepare. 

• For landlords earning over £50,000 annually: You’ll need to use MTD-compatible software to submit your tax returns starting 6 April 2026.
• For landlords earning between £30,000 and £50,000: You’ll transition to MTD submissions from 6 April 2027.
• For landlords earning under £30,000: The government intends to bring you into the MTD system before the end of this parliament.

For more information and to stay informed about Making Tax Digital, visit this government site. 

Landlords can better navigate the upcoming April tax changes by staying well-informed and adapting strategies to meet these evolving requirements and changes. 

Please note that this article contains general information about upcoming tax changes for landlords in 2025 and is not financial advice. If you’re unsure of your tax obligations, seek independent and professional financial advice.