Credit Check
In this article, Liquid Expat Mortgages’ CEO and founder, Stuart Marshall, looks at 5 of the top tax predictions for the Autumn 2025 Budget and explains how this could affect UK expat and foreign national property investors.
Some Background.
Every time the Budget nears, all talk in the property market turns to the possible changes that could be made by the Chancellor and how it will affect property investors. There have already been many rumoured tax changes put forward by analysts and experts as we approach the Budget, which is set for the 26th November 2025. However, before we address some of the rumoured tax changes, it’s important to recognise that the speculation on possible changes is just that – speculation. Last year saw the same speculation, as many media outlets reported that the tax-free pension allowance could disappear entirely. In some cases, people made snap decisions which have damaged their finances.
‘UK expat and foreign national investors do need to pay attention to the Budget. To that end, following speculation on the leadup is important so that they are aware how their situation might change or evolve. However, they should treat this as a valuable ‘what if?’ exercise, stress-testing their investment portfolio and planning for how they can make it as flexible and resilient as possible.’
The Top 5 Tax Rumoured Changes.
There are many rumoured measures that could be included in the Budget. Liquid Expat Mortgages have picked out the measures that are most relevant to UK expat and foreign national investors.
National Insurance on Landlords.
The rumoured changes to national insurance on landlords would represent a huge change to UK expat and foreign national investors. Currently, NI is paid by those earning over £12,750 a year, with earnings from buy-to-let properties largely exempt from these charges. This would be an attractive target for the Treasury as landlords earned £27 billion in net profits in 2022-23. If these earning were subject to the 8% NI levy that employee incomes are, it would have generated £2.2 billion in tax.
This would obviously have a direct impact on UK expat and foreign national property investors. However, despite the tempting amount of revenue this would generate, it’s unlikely that the Chancellor would opt for this measure as the increased costs for landlords would be passed on to tenants in the form of rent increases. This would clash with the government’s commitment to affordability aims in the rental market.
Income Tax.
There are rumours of increases to income tax – either in the form of 2p higher tax rates or in the form of frozen income tax thresholds. The former is less likely as it would represent a significant break from Labour’s manifesto promises around income tax. While some speculation has them balancing this with a 2p cut in national insurance (effectively neutralising the effects of an income tax increase for working people who pay both taxes), it’s more likely that they will opt to freeze income tax thresholds, often referred to as a ‘stealth tax’. This would mean that, as wages increase, people effectively pay more tax or fall into higher tax brackets.
Changes to income tax would obviously have an effect on UK expat or foreign national landlords who will be paying more of their profits to the Treasury. However, there are ways to mitigate the impact of these changes including incorporating property portfolios in a limited company, which has become a very popular strategy for UK expat and foreign national investors in recent years.
VAT Threshold Cuts.
Some of the rumoured changes to VAT thresholds involve dropping the registration limit from £90,000 to between £30,000-50,000 and making exempt services – like health or tutoring – subject to VAT. This is one of the more likely measures that the Chancellor could implement and would mean that more service providers pass on costs to consumers, which would indirectly raise expenses for property maintenance. ‘Despite this, rental demand and profits are good enough to insulate UK expat and foreign national investors from damaging effects of these costs. What this does again highlight is the importance of good, specialist mortgage products and a quality choice of investment property.’
Capital Gain Tax Rate Alignment.
Some media speculation has proposed that capital gains tax rates could be brought into closer alignment with income tax. While this is not a guarantee in the autumn budget, it’s highly likely that it will happen over the long-term as governments face greater pressure to increase treasury revenue without increasing income tax, VAT or national insurance. ‘This would have significant impact on UK expat and foreign national investors who are selling their rental properties’ says Stuart. ‘It would obviously erode capital gains and encourage investors to hold their properties for longer. However, property investment in the UK is still a solid earner and while this might change long-term investment strategies, there are still ways and means to mitigate the impact of such changes. Seeking expert advice from companies like Liquid Expat Mortgages will help to ensure that investors’ portfolios are as future-proofed as possible.’
ISA Limits and Windfall Taxes.
There is strong speculation that ISA limits will be halved to £10,000. This would limit tax-free savings options and potentially push more people towards property investment which would increase competition for UK expat and foreign national investors. While this is unlikely to affect buy-to-let investors too much, it is paired with speculation that the Chancellor could also levy a windfall tax on banks. This would likely increase mortgage rates, which would further increase costs for UK expat and foreign national investors.
Despite earlier speculation, windfall taxes on banks now seem unlikely. Further, UK expat and foreign national investors have exclusive mortgage products and deals available through specialist mortgage brokers, which would ensure that good deals remain available for them compared to those offered by Highstreet lenders.
Analysis.
In general, the government seems to have changed its plan over recent months. Rachel Reeves and Keir Starmer were very resistant to touching the ‘big three’ taxes: income tax, national insurance and VAT. However, it now seems like they’re favouring changes to these taxes as a simpler and more effective route than more targeted measures like changes to inheritance tax or property taxes. ‘The 2024 Budget seemed to take aim at property investors more than the changes rumoured in the 2025 Budget, so UK expat and foreign national investors shouldn’t be too spooked by any of the speculation.’
‘Even if property taxes do see marginal increases, the odds are still in investors’ favour’ continues Stuart. ‘This is because of the fundamentals of supply and demand: rental demand is still strong and the number of rental properties available is still well below the levels needed to correct this imbalance. Property is still unaffordable for many would-be buyers, meaning renters have no choice but to remain in the rental market. Meanwhile, the amount of rental stock is staying roughly the same, while rental standards are improving because of reforms to the rental market.’
Ultimately, UK investment properties are still resilient, and a combination of rents and demand should absorb any of the material changes that affect UK expat and foreign national investors in this budget.
Liquid Expat Mortgages
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