UK Autumn Statement 2025 - Five predictions for Indian property investors

Prediction 1: The mansion tax (annual property levy)

Rumours say that the government is considering an annual, property-value-based levy on high-value homes, also known as the Mansion Tax. This tax could be a 1% charge on homes valued at around £2m or more.

Unlike Stamp Duty, Mansion Tax will be a recurring annual charge that may hit your net rental yields and holding costs. For instance, a £3m house in London with a 1% tax = an extra ~£10,000 a year.

Over the course of the next five years, that adds to approximately £50,000 of extra cost before you sell.

Prediction 2: Stamp duty shake-up

The new Budget points towards two types of possibilities. The first one indicates a further rise in the Non-Resident Surcharge (NRS) on Stamp Duty Land Tax (SDLT). This is a tax that non-UK buyers are already paying.

The second possibility can be a structural shift where the seller, not the buyer, pays Stamp Duty.

If NRS increases, it will immediately hike purchase cost, meaning you will need more upfront cash.

If the seller is to pay, the economics of selling change. Your buyer pool, net proceeds and negotiation dynamics shift. If sellers are picking the tax tabs, they may reduce asking prices.

Prediction 3: Capital gains tax (CGT) may rise

The Chancellor may push CGT closer to income tax rates for property gains, rumours suggest. Market experts are predicting alignment with income tax bands as a real possibility.

Why is this a profit risk? If approved, CGT may apply when you sell, reducing the cash you keep at exit.

For instance, if you buy a property at £500,000 and the selling price is £800,000, you gain £300,000. At current 24%, this tax totals to £300,000 × 0.24 = £72,000.

At the proposed 40% CGT, the new calculation will be: tax = £300,000 × 0.40 = £120,000. The difference of £48,000 is less in your pocket on a single sale.

Prediction 4: National insurance (NI) on rental income

There are reports that UK officials can charge National Insurance on rental income, a new payroll-like charge on landlords.

For Indian landlords, this tax will result in an additional recurring tax on rental profits in addition to the current income-tax obligations under the Non-Resident Landlord (NRL) rules.

Prediction 5: Inheritance tax (IHT) rules

The UK Government has already approved moves to freeze Inheritance Tax thresholds and tighten reliefs in recent policy cycles. In the upcoming Budget announcement, additional freezes or added limits on tax-free gifts are expected.

Inheritance Tax is effectively 40% on UK assets above thresholds. Freeze implies that over time, more estates will fall into this tax bracket as thresholds don’t keep pace with inflation or house price growth.

Our analysis: What can you do before 26 November?

It’s ideal to take measurable steps now. Avoid waiting to see the changes and reacting, as it is often the most expensive choice. Timely action will prevent your property from any avoidable tax shocks.

• Run a portfolio health check on your cash flow, loan covenants and 12-month liquidity.
• You can also plan the CGT exit model.
• Run the current law vs the anticipated CGT percentages and calculate which properties become uneconomic to sell.
• If you are buying a property in the UK as an Indian buyer, double-check the deposit amount, SDLT and NRS.
• For IHT, ensure an updated will and cross-border estate plan.

Frequently asked questions for Indian investors buying property in London

Should I pause buying in London until after the Budget?

It is not necessary. If you are aiming for a long-term purchase and fundamentals stack up in your favour, market timing will rarely outperform buying the right asset. Only if you are selling to flip or sell, factor in the tax scenarios.

Will property values in the UK collapse if taxes rise?

The UK property market is unlikely to collapse, thanks to supply constraints and global demand.

How will the new Budget affect the NRL (Non-Resident Landlord) rules?

NRL will continue to be the mechanism that levies taxation on non-resident rental income. Potential NI charge or additional taxes may be added on top of existing NRL tax obligations.

Let Benham and Reeves help you plan better

Let our experienced team of agents in India (Delhi & Mumbai) help you with a free pre-Budget portfolio review. We will offer tailored insights on CGT, SDLT/NRS and potential NI impacts on your specific holdings.

Ideally, you don't wait for the Budget to be announced. Book a no-obligation consultation with Benham and Reeves India. Our experts will run the numbers and assist you with non-technical steps that don’t leave your London property investment shaken by any surprises.