The Autumn Budget is confirmed for Wednesday 28 October, and as ever the weeks beforehand are filling up with speculation. This year, more of it than usual is landing on capital gains tax. Here’s our reading of what’s confirmed, what’s rumour, and what it might mean if you own a rental or second home in central London.
Why CGT is in the spotlight
This is the first Budget under Prime Minister Andy Burnham and Chancellor John Healey, and the Government has committed to the manifesto promise not to raise income tax, VAT or National Insurance for working people. That pledge is narrow by design: it says nothing about capital gains, dividends, pensions or ISAs. With the big three off the table, CGT is one of the few substantial levers left, which is why almost every pre-Budget prediction we’ve read points in its direction.
It’s worth remembering how much CGT has already shifted. The annual tax-free allowance has fallen from £12,300 in 2022/23 to just £3,000 today, and the October 2024 Budget brought the main rates into line with the residential property rates of 18% and 24%. Property owners have been at the sharp end of this for a while.
What’s already confirmed (Budget or no Budget)
Several changes affecting property owners are locked in from last November and will happen regardless of what’s said on 28 October:
- Landlord income tax rises from April 2027. Individual landlords will pay an extra two percentage points on rental income, taking the rates to 22%, 42% and 47%. Landlords who hold property through a company are not affected.
- The “mansion tax” from April 2028. A council tax surcharge of between £2,500 and £7,500 a year will apply to homes valued at £2 million or more, based on 2026 values. Across prime central London that captures a large share of the market: whole streets in Chelsea, Kensington and Belgravia, and a growing number of houses and larger apartments in Battersea, Fulham and the riverside developments.
- Stamp duty stays put. The 5% surcharge on additional properties and the 2% overseas buyer surcharge remain, and the Government has ruled out scrapping or replacing stamp duty in this Budget, despite earlier talk of a land value tax.
- CGT on residential property is unchanged for 2026/27 at 18% and 24%, with the £3,000 exemption.
What’s being speculated
The headline rumour is that CGT rates could be moved closer to income tax rates. That would be a significant change for anyone selling an investment property, and it has been floated by a number of senior figures. To be clear, it is talk rather than policy at this stage. Other possibilities being discussed include further tightening of Business Asset Disposal Relief and a lower threshold for the mansion tax surcharge; neither has been confirmed.
The point that matters most for timing is this: Budget tax changes usually take effect from the start of the next tax year, which would be 6 April 2027. But the Chancellor can make a change apply from Budget day itself, and that possibility is what tends to bring forward sales in the run-up.
We should also say what hasn’t been touched. Before the last Budget there was considerable noise about CGT on main residences. Nothing came of it, and we’ve seen no serious signal that Private Residence Relief is in the frame this time either. If you’re selling the home you live in, this is not something to lose sleep over.
What we’re seeing across central London
Pre-Budget uncertainty has a predictable effect on the market: it prompts owners who were already on the fence to act. We’re expecting a modest increase in instructions from landlords and second-home owners through September and October, particularly from “accidental” landlords who are now looking at the April 2027 income tax rise as well as a possible CGT change on top.
For buyers, that can mean a little more choice in the flat and small-house market over the autumn, particularly in the areas with a high concentration of buy-to-let stock, which is worth knowing if you’ve been waiting for the right one to come up.
A sensible way to approach it
Our advice is to plan around what’s confirmed rather than what’s rumoured, but to be ready to move if the picture changes.
- Know your numbers now. If a sale in the next twelve months is a real possibility, get a current valuation and understand what your gain would look like under today’s rules.
- Speak to your accountant. We’re estate agents, not tax advisers. Whether to sell, hold, or restructure is a decision that needs proper advice on your own circumstances.
- Be ready, not rushed. Having a property valued, photographed and prepared means you can choose your timing rather than react to a headline.
If you’d like a valuation or an honest conversation about how the market is behaving in central London right now, we’re always happy to help.
