As 2025 unfolds, UK landlords—particularly in London—face major tax updates that can significantly impact their rental income,
property investments, and long-term financial strategies. Staying compliant and informed is crucial, especially with increased scrutiny by HMRC and a tighter regulatory landscape.
At London Estate Agency, we specialise in guiding landlords through complex tax and legal changes while ensuring your rental portfolio remains profitable.
🔍 Key Tax Changes Affecting London Landlords in 2025
Capital Gains Tax (CGT) Changes
Starting in April 2025, landlords disposing of residential property will face a revised CGT allowance, dropping further from previous years.
The annual exempt amount is now £3,000, down from £6,000 in 2024 and £12,300 in 2023.
This means more of your profit from a property sale will be taxable.
Acting quickly is key if you’re considering selling an investment property.
Our team can connect you with cash buyer investors who are ready to purchase swiftly before new tax rules bite into your returns.
Section 24: Full Impact Now Felt
Since the Section 24 mortgage interest relief changes were phased in (starting in 2017 and fully implemented by 2020), l
andlords have been taxed on gross rental income, not net profit. In 2025,
many landlords are now fully experiencing the tax burden, especially those with interest-only buy-to-let mortgages.
What this means:
- You can no longer deduct your mortgage interest from rental income.
- You only receive a 20% basic rate tax credit on mortgage interest.
At London Estate Agency, we offer portfolio restructuring advice and can recommend incorporation routes to transition to a limited company model, where interest is still tax-deductible.
Making Tax Digital (MTD) for Income Tax
It is mandatory from April 2026 for landlords earning over £50,000 annually—but preparation starts now.
Landlords must:
- Use HMRC-compliant software
- Submit quarterly updates
- Provide a final year-end declaration
Let us take the stress off your plate. Our property management platform already aligns with MTD standards,
and we offer end-to-end support to digitise your accounting and stay compliant with zero hassle.
Reduced Lettings Relief
Lettings Relief, once a generous tax break, is now only available if you share occupancy with the tenant.
Most landlords have now lost out on thousands in tax savings. Our team can help you explore alternative tax planning routes, including:
- Gifting strategies
- Inter-spouse transfers
- Trust setups
Energy Efficiency and Tax Incentives
The push toward greener homes intensifies from 2025.
Properties must aim for EPC ratings of C or above by 2028. Tax allowances for eco upgrades are available, but only if claimed correctly.
We provide EPC assessments in-house, and our consultants will guide you on:
- Eligible insulation, heating, and solar upgrades
- Claiming allowable expenses and green investment reliefs
Why London Landlords Must Act Now
Ignoring these tax updates can result in:
- HMRC penalties
- Reduced profit margins
- Unnecessary capital erosion
By acting now, you can preserve your cash flow, stay compliant, and enhance the value of your property portfolio.
We offer tailored tax guidance, rent protection, tenant screening, and full property management—everything you need to future-proof your lettings business under one roof.
Common Questions London Landlords Ask About the 2025 Tax Changes
Should I switch my buy-to-let property to a limited company?
Yes, in many cases. While initial costs and stamp duty implications exist, long-term tax savings through mortgage interest deductibility and lower corporation tax rates often make it worthwhile.
We’ll assess your situation and provide bespoke incorporation advice.
How can I reduce my CGT liability if I’m selling?
Consider:
- Selling in joint names (if married)
- Spreading disposals across tax years
- Claiming allowable costs (legal, agents, renovations)
We’ll calculate the most tax-efficient exit strategy and connect you with buyers immediately.
What software should I use for MTD?
Our property software partners are HMRC-compliant and easy to use.
When you work with us, you get free access to a digital tax platform, plus our team handles the updates for you.
Are eco upgrades tax-deductible?
Yes, many are. Heating systems, insulation, and renewable tech installations can qualify as capital allowances or repair expenses.
We’ll help you maximise claims while increasing your rental value and compliance rating.
What if I don’t comply with the new rules?
You risk:
- Fines
- Backdated tax bills
- Tenancy voids from non-compliant EPC ratings
We ensure you remain legally compliant and profitable, with minimal disruption to your rental income.
Our Landlord Support Services – Tailored for 2025 and Beyond
At London Estate Agency, we don’t just react to tax changes—we anticipate and plan.
Here’s how we help landlords like you:
- Tax Planning & Incorporation Strategy
- Quarterly Tax Filing & MTD Setup
- Rent Protection & Legal Compliance
- Full-Service Lettings & Property Management
- EPC Upgrades & Certification
- Instant Sales to Cash Buyers
Don’t face these changes alone. We’re here to help you thrive, not just survive.
Our end-to-end support gives you peace of mind and consistent rental income—all while staying fully HMRC-compliant.
Final Thoughts: Proactive Landlords Will Win in 2025
The 2025 landlord tax changes are not just bureaucratic red tape—they’re pivotal shifts shaping your property returns for years.
The key to success lies in early action, strategic planning, and partnering with the right professionals.
Please speak to our expert team today at London Estate Agency and protect your investments before costly mistakes occur.
