Will the 2027 Property Tax Split Increase Compliance Burden for Landlords?

Under the new framework, property income will be taxed at 22% (basic rate), 43% (higher rate), and 47% (additional rate). Devolved governments in Scotland and Wales may also set their own property tax rates, adding another layer of complexity.

For landlords, investors and letting businesses, the question is clear:
Will this new system increase the compliance burden?

Below, we break down what the changes could mean and how trusted Property Accountants like PayLess Accountants can help landlords stay compliant without stress.

What the 2027 Property Income Tax Split Means

Until now, landlords paid tax on property income as part of standard income tax bands.
From 2027, property income becomes a separate tax category, which means:

• More detailed reporting

• Different tax calculations for property vs non-property income

• Possibly different rules depending on location

• A higher risk of filing errors for landlords with mixed income sources

While the intention is to create a clearer tax system, the added layers may complicate compliance—especially for landlords with multiple properties or incomes.

Will Compliance Get More Difficult?

1. More Record-Keeping Requirements

Landlords will need to track property income separately from salaries, pensions or dividends.
This means:

• Separate ledgers

• More detailed expense tracking

• Clearer distinction of taxable vs allowable costs

For many, this will increase administrative work unless supported by professional accounting help.

2. Higher Risk of Miscalculations

With new tax bands and possible regional variations, calculation errors may become common.
Landlords in Scotland or Wales may have different property tax rates than those in England, creating confusion.

Property Accountants will play a crucial role in ensuring property income is taxed correctly based on the owner's location and structure.

3. Challenges for Landlords With Multiple Income Streams

If you earn from:

• Employment

• Self-employment

• Property

• Capital gains

…your tax return could become significantly more complicated.
HMRC will expect clear separation, detailed reporting, and accurate categorisation—making professional support more necessary than ever.

4. Greater Pressure on Self-Assessment Filing

With the 2027 changes, the margin for mistakes narrows.
Incorrect submissions could result in:

• Penalties

• Delayed refunds

• HMRC compliance checks

Working with specialist Property Accountants like PayLess Accountants can reduce risk and ensure full compliance with the new legislation.

How PayLess Accountants Can Help Landlords Navigate 2027 Changes

At PayLess Accountants, we specialise in supporting UK landlords and property investors with:

 Property income tax planning

 Accurate self-assessment filing

 Bookkeeping for rental income

 Guidance on allowable expenses and deductions

 Compliance with changing HMRC rules

Our expert team ensures you stay ahead of tax reforms and avoid unnecessary penalties—saving you time, money and stress.

Final Thoughts

The 2027 property tax split is designed to modernise the system, but it is likely to increase compliance complexity—especially for landlords with diversified income streams.
Now is the right time to prepare.

Partnering with expert Property Accountants such as PayLess Accountants ensures you remain compliant, optimised and ready for the upcoming changes.

Disclaimer: This article is for general informational purposes only and does not constitute financial or tax advice. Tax regulations may change, and individual circumstances vary. Landlords should seek professional guidance from qualified Property Accountants or consult PayLess Accountants for personalised advice.