The Autumn Budget, announced on 26 November 2025, has long been rumoured to bring significant changes to taxes, savings, and property rules that affect both first-time buyers and those looking to move.
From possible reforms to stamp duty, council tax and inheritance tax, to adjustments in ISAs and personal savings allowances, we examine what was actually announced, what wasn’t, and how the changes could impact how people save, buy, and move homes.
What was announced in the Autumn Budget?
Mansion Tax
Some kind of ‘Mansion Tax’ on higher-value properties was widely reported to be included in the Budget, and now we know the details.
From April 2028, homes valued at £2 million or more will be subject to a council tax surcharge. There will be several bands of tax, starting at £2500 per year for homes worth between £2 million and £2.5 million and rising to £7500 per year for properties worth more than £5 million.
This will impact a very small amount of homes in the UK – fewer than 1% of properties in the UK are worth £2 million or more. Most of these are located in London and the South East.
Homes in the top council tax bands of F, G and H may be revalued in order to enforce this tax, but details on how homes will be valued aren’t yet clear.
Freezing income tax thresholds
Income tax thresholds have been frozen since 2021, and the Autumn Budget has announced that they will remain frozen until the 2030/31 tax year.
Freezing income tax thresholds is often called a ‘stealth tax.’ This is because, as wages rise but tax thresholds stay the same, tax is paid on a higher percentage of income. This then raises more income for the government.
Frozen income tax thresholds could have an impact on homebuyers. Even as your wages rise, your affordability for a mortgage may not rise proportionately, as you’ll be paying tax on a higher percentage of your income than you would be if income tax thresholds rose in line with earnings. So, you may need to reconsider which properties you can afford.
Cuts to cash ISA allowances
It’s been announced that the cash ISA allowances are changing. Currently, all savers can invest up to £20,000 per year into cash ISAs and not pay any tax on the interest you earn from your investments. This is staying the same for those aged 65+.
However, those aged under 65 will now only be able to invest £12,000 yearly in cash ISAs, and the remaining £8000 will be reserved exclusively for investment, such as stocks and shares.
All of the interest earned on these investments will remain tax-free. This is compared to traditional savings accounts, where you may have to pay tax on the interest if you go over your Personal Savings Allowance.
If you’re saving to buy a home, are aged under 65, and currently invest more than £12,000 per year in a cash ISA, you will have to invest any amount over £8000 in other types of investments. These types of invesetments can be riskier than cash ISAs, but can also lead to higher returns.
What is the Personal Savings Allowance?
The Personal Savings Allowance (PSA) is a UK tax rule that lets you earn a certain amount of interest on your savings each tax year without paying any tax on it.
Your PSA will depend on the rate of income tax you pay.
- If you’re a basic rate (20%) taxpayer, you can earn up to £1000 in interest tax-free.
- If you’re a higher-rate (40%) taxpayer, you can earn up to £500 in interest tax-free.
- If you’re an additional rate (45%) taxpayer, you don’t get an allowance, and all savings interest is taxable.
- If you’re not a taxpayer (you earn less than £12,570 in income per year), you may be able to earn up to £18,570 in interest tax-free, but this depends on your level of income and where it comes from.
Notes
Banks and building societies report your interest to HMRC, which automatically adjusts your tax code if needed. You usually don’t have to do anything manually.
Interest from bank accounts, savings accounts, credit unions, and peer-to-peer lending all count toward this allowance.
Cutting energy bills
The government was reportedly considering cutting the current 5% VAT rate on energy bills. While a cut to the VAT rate hasn’t been announced, Chancellor Rachel Reeves has said energy bills should reduce by £150 per year for the average household. This is because the government are scrapping the Eco energy scheme, which currently makes electricity more expensive.
If energy bills go down, it’s good news for homeowners. But, it’s not just this group that will benefit. Renters who pay bills separately from their rent will also see lower bills.
Higher taxes for landlords
Before the budget, it was widely speculated that landlords would be required to pay National Insurance at a rte of 8% on profits, the same as other self-employed people. While this is not currently going ahead, the rate of income tax on rental income will increase by two percentage points from 2027.
The basic rate of tax will rise to 22%, the higher rate will rise to 42% and the additional rate will rise to 47%.
Most homebuyers would not be directly impacted by this. However, it could mean rents rise, making it harder for first time bueyrs to save for a deposit. On the other hand, it may lead to more landlords selling up, leading to a greater supply of homes to available to buy.
What predicted changes aren’t going ahead?
Inheritance tax on gifts
It was rumoured that the Autumn Budget could introduce different rules around inheritance tax and how gifts may be taxed. The main predicition was the introduction of a cap on the amount someone can gift inheritance tax-free in their lifetime, possibly impacting homebuyers who have some or all of their deposit gifted by a family member or friend.
This change was not announced in the budget.
Click here for more information on how inheritance tax currently works.
Council tax reform
The government was reportedly considering a new annual local property tax to replace the current council tax system. Council tax bands are currently based outdated property prices from 1991 that do not necessarily accurately reflect a home’s value today.
These broad reforms were not announced in the budget – though a new council tax surcharge (the ‘Mansion Tax’) is being introduced for homes worth £2 million and over.
Scrapping stamp duty & replacing it with a new tax
Before the Budget, it was reported that the government was considering scrapping stamp duty on owner-occupier homes (where the owner lives there as their main residence). It was thought it could be replaced by an annual tax on properties sold for more than £500,000 at a rate of around 0.54%. This could have led to many buyers paying more tax than they would have with stamp duty.
This change was not announced in the budget. However, properties worth £2 million or more will be subject to a council tax surcharge – this is separate from stamp duty.
What is stamp duty?
Stamp Duty Land Tax (SDLT, or commonly just stamp duty) is a tax you pay when you buy property or land in England over a certain price.
2025 stamp duty rates
You pay stamp duty on the portion of the property price that falls within each band (it’s tiered, like income tax). For example, if a property costs less than £125,000, no stamp duty is paid. If it costs £250,000, no stamp duty is paid on the first £125,000, and a rate of 2% is paid only on the proportion of the price above £125,000. So, a total of £2500 is paid.
Stamp duty for first time buyers
If you’re a first time buyer (you have never owned a property in the UK or abroad), you may get a relief:
- No stamp duty is paid on the first £425,000 of the property price.
- 5% is paid on the portion between £425,001 and £625,000.
- If the property costs more than £625,000, you don’t get the first time buyer relief and normal stamp duty rates apply.
Stamp Duty on Additional Properties (Buy-to-Let / Second Homes)
If you’re buying an additional property, there’s usually an extra 5% stamp duty to be paid on top of the standard rates for each band.
Click here for more information on the current rates of stamp duty.
Capital Gains Tax when selling your main home / “Mansion Tax”
It’s was reported that the government is considering implementing Capital Gains Tax (CGT) when someone sells their main home. The rate would be based on how much the home has increased in value since it was bought, reportedly only payable on high-value properties.
Currently, CGT isn’t paid when someone sells their main home, no matter its total value or increase in value since purchase. However, it is currently payable when selling certain types of property, such as second homes and buy-to-let properties.
This change was not annonced in the Autumn Budget
What is Capital Gains Tax (CGT)?
Capital Gains Tax (CGT) is a tax you pay on the profit (or “gain”) you make when you sell or dispose of an asset that’s increased in value.
It’s not the total amount you receive that’s taxed. You’re only taxed on the gain (the difference between what you paid for it and what you sold it for).
When Capital Gains Tax Applies
You might have to pay CGT when you sell or dispose of the following, and make a profit:
Business assets
Property (that’s not your main home, but is, for example, a second home or buy-to-let)
Shares or investments
Valuable personal items worth more than £6,000 (like art, jewellery, or antiques)
A rise in income tax
It was reported that a rise in income tax was being considered, alongside the freeze in income tax thresholds. This would have marked the first time the basic rate of income tax has risen in more than 50 years.
However, it has not been announced at this year’s Autumn Budget.
What are the current rates of income tax?
- Currently, no income tax is paid on earnings below £12,570 per year. This is the Personal Allowance.
- The basic rate of tax is paid on earnings between £12,570 and £50,270 at 20%.
- Higher rate tax is paid on earnings between £50,271 and £125,140 at 40%.
- Additional rate tax is paid on earnings over £125,140 at 45%.
What should first time buyers in light of the Autumn Budget?
For first-time buyers, the Autumn Budget brought no major tax changes that directly affect the cost of buying a home. Stamp duty remains unchanged, and widely-rumoured policies such as limits on gifted deposits were not introduced.
That means the practical steps for buying your first home remain largely the same. However, there are a few points worth considering:
Review your savings approach
If you’re under 65 and save large amounts into a Cash ISA each year, the new £12,000 limit may mean adjusting your strategy. Anything above this will need to go into investments, which can offer higher returns but come with more risk. If you’re saving for a deposit, make sure your investment choices align with your time frame and risk appetite.
Consider your affordability
Freezing income tax thresholds until 2030/31 means your take-home pay may not grow as quickly as your gross salary. Lenders assess affordability based on net income and other commitments, so double-check how this could affect the mortgage amount you’re eligible for.
Higher rents = longer to save
Thanks to the new higher rates of tax on rental incomee, landlords may put up rents. This could mean it takes longer for first time buyers to save for a deposit to buy a home due to less disposable income.
Cautiously factor in energy bill reductions
Lower energy bills could modestly help with monthly budgeting, but lenders generally won’t factor these savings into affordability assessments. Treat this as a welcome extra buffer rather than additional borrowing power.
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What should home movers do in light of the Autumn Budget?
For home movers, the Autumn Budget also avoided major upheaval, but the implications differ slightly from those for first-time buyers.
Stamp duty remains unchanged
If you’re planning to sell and buy on, your expected stamp duty bill will be the same as before the Budget. This may help you plan your move with more certainty.
The new council tax surcharge may matter, depending on your property
If you own (or are considering buying) a home worth £2 million or more, the new surcharge in place from 2028 is worth factoring into long-term affordability. For most movers, this will not apply. But, if you’re buying near this threshold, it may influence future demand and resale considerations.
No CGT on main residences
The government did not introduce Capital Gains Tax on main home sales. This means moving home remains tax-free in terms of gains, which is positive if your property has significantly increased in value.
Consider how frozen income tax thresholds affect your next mortgage
If you’re upsizing, lenders may offer you less than you expect if your net income growth doesn’t keep up with your gross salary increases. It may be worth speaking to a mortgage adviser early to reassess your borrowing capacity.
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