The 2026 Budget for landowners: rent, sale timing and land for social housing

The Chancellor, John Healey, delivered the Budget on 28 October 2026. We have read the parts that reach land so that owners know what has changed and when. Two are costs, one is a relief that stays as it was, and one makes a sale simpler.

Rent from land is taxed more from April 2027

From 6 April 2027, income from property will be taxed at its own rates in England, Wales and Northern Ireland: 24% for basic rate taxpayers, 44% at the higher rate and 49% at the additional rate. In this tax year it is taxed at the ordinary rates of 20%, 40% and 45%. The 2025 Budget had already announced two points of the rise. This Budget added two more.

For an owner who lets land, this is the change most likely to show up in a tax bill. Rent from a farm tenancy or a solar lease is property income when an individual or a partnership receives it. Companies pay corporation tax instead and are not affected.

On £20,000 a year of rental profit that falls entirely in the higher rate band, the tax rises from £8,000 this year to £8,800 from 2027-28.

The rent itself does not change. But an owner weighing a long lease, such as a solar option, should run the numbers at the new rates.

The relief on selling a business halves in April 2027

Business Asset Disposal Relief taxes qualifying gains at 18% instead of the usual 24% for higher rate taxpayers. It applies only in particular circumstances, broadly when someone sells all or part of a trading business, including a farming business. Selling a field while carrying on farming does not usually qualify. From 6 April 2027 the lifetime limit on gains that qualify falls from £1 million to £500,000.

The Treasury says three-quarters of people who claim the relief will still get it on their whole gain. For a family selling a farming business, or part of one, the larger gains are the ones affected.

Timing now matters. Disposals made before 6 April 2027 keep the £1 million limit. The Treasury’s overview of the tax changes says there are “special provisions” for contracts entered into before that date that have not been completed by it. If you have a sale in progress, or a contract that depends on a planning decision, ask your tax adviser how those provisions apply to you before 6 April.

The ordinary rates of capital gains tax stay at 18% and 24%.

Inheritance tax reliefs stay where they were

The Budget left the inheritance tax rates, thresholds and farmland reliefs alone. Agricultural and business property relief still give 100% relief on the first £2.5 million of combined qualifying property, and 50% above that. The nil-rate band stays at £325,000 and the residence nil-rate band at £175,000.

That means what we wrote in selling farmland after the 2026 inheritance-tax changes still stands. So does the tax section of solar on farmland, where we noted that letting land can raise questions about agricultural relief.

Selling land for social housing gets simpler

For land, this is the most useful change in the Budget.

From 1 April 2027, land sold to a registered provider of social housing, such as a housing association, will be zero rated for VAT. VAT on land can be a cost a housing association cannot recover. The government’s consultation response says most social housing schemes are now structured around what is known as “golden brick”, where the transfer of ownership is delayed until building work has gone far enough for a different VAT relief to apply. Respondents described delays to land transfers, higher financing costs and more legal work as a result.

The new relief turns on who buys the land, not what it is used for. A housing association will be able to buy land outright and early. For an owner selling direct to one, that should mean a simpler contract and an earlier completion. The legislation is due in early 2027.

It has limits. The relief covers sales to registered providers only. Respondents asked for joint ventures, development subsidiaries and “certain Section 106 arrangements” to be included, and the government’s response limits the relief to sales to registered providers. Most land sold to a housebuilder, with affordable homes passed to a housing association later, will work as it does now.

The money behind social housing has grown too. The Budget adds £1.5 billion to the Social and Affordable Homes Programme for around 10,000 homes, prioritised for Social Rent and especially council homes, and keeps cheaper government loans for council housebuilding for another year. More public money is looking for land on which to build social homes.

Your First Home: the builders’ side

The first-time buyer scheme we covered in Your First Home: what it means for land now has its terms. Buyers of new-build homes in England put down at least 2.5%, and the government lends 20%, interest free for five years. Household income is capped at £110,000 outside London, and each council area will have a price cap based on local median prices. The full list of caps has not been published.

Two terms matter for land. Developers pay a fee of 1% to 4% of the price of each home sold through the scheme, rising with the number they sell through it each year. And the funding is capped at £1 billion a year from 2028-29. The Office for Budget Responsibility expects the scheme to have only a marginal effect on housing supply.

The direction is still the one we described in September: support for housebuilders’ sales, which is what lets them buy land. The scale is smaller than Help to Buy, and the local caps will decide where it reaches.

The forecaster’s view of housebuilding

The Office for Budget Responsibility now expects about 220,000 net additional homes in each of the next two years, and 190,000 fewer over its forecast than it expected in March. It puts that down to weak demand and to costs outside the planning system, including the Building Safety Levy, biodiversity net gain and nutrient mitigation.

It also says it has not changed its judgement that the 2024 planning reforms “will have a positive impact on housebuilding”. For a landowner, that is the more important half of the forecast. The reforms have opened new routes to permission, as we set out in the new route for land beside a settlement. What has slowed is the market for the homes.

Smaller changes

• Red diesel. The 3.7p a litre cut in duty is extended to 1 July 2027.
• Fertiliser. Import tariffs are suspended until the end of December 2027.
• Biodiversity net gain. Residential brownfield sites up to 1.5 hectares are to be exempted, from a date still to be announced. Greenfield farmland is not brownfield, so schemes on it still need a 10% gain. Small brownfield schemes that would have bought off-site units will no longer need them once the exemption starts. We explain the off-site market in Biodiversity Net Gain for landowners.
• The £2 million surcharge. From April 2028 owners of homes worth £2 million or more will pay a yearly charge on top of council tax. Farmhouses and farmworkers’ accommodation on working farms will get a discount, and the government says it will work with the agricultural sector on its scope.
• Stamp duty. No change to the rates for buying a home.

What to do now

If you let land, look at what the new rates do to your income from April 2027. If you are selling a business or business assets, or have a sale in progress, talk to your tax adviser about the 6 April 2027 date. If you are thinking about land for affordable or social housing, the VAT change from April 2027 makes a direct sale to a housing association easier than it has been.

Each of these choices starts with what the land could be used for. Our free Land Potential Check gives a first read of the planning constraints on a piece of land, drawn from national planning data. It is an indication, never a valuation.