Landlords across England are heading into one of the most transformative periods in modern property management. With sweeping legal and tax reforms due in 2026, the next 18 months will be critical for preparing portfolios, finances, and compliance systems.

From the government’s Making Tax Digital (MTD) rollout to the Renters’ Rights Bill (RRB) reshaping how tenancies are managed, every landlord—whether a single-property investor or a portfolio owner—will need to adapt to new reporting, structural, and operational realities.

This article is part of NetRent’s in-depth “Landlords in 2026” series, exploring the changing legal, financial, and insurance landscape. You can also read our companion pieces:

• [Law for Landlords: Navigating the Renters’ Rights Bill]

• [Insurance for Landlords: Protecting Income in a New Era]

• [Mortgages for Landlords: Financing Under the 2026 Reforms]

1. Taxation: A Digital and Fiscal Reckoning

Making Tax Digital (MTD) becomes mandatory

From April 2026, landlords earning over £50,000 in gross rental income will be required to keep digital records and submit quarterly tax updates through MTD-compliant software.

While this may sound like a technical change, it represents a major operational shift:

• Quarterly reporting replaces the traditional single annual return, demanding accurate, real-time bookkeeping.

• MTD penalties will apply for late or inaccurate submissions, meaning landlords who rely on paper records or ad-hoc spreadsheets risk costly mistakes.

• Software integration with property management systems will become the new standard for efficient compliance.

Capital Gains Tax (CGT) pressures mount

The CGT allowance has been slashed to £3,000—down from £12,300 just a few years ago. For landlords selling properties, this means higher tax bills and tighter timing when planning disposals.

With the Renters’ Rights Bill reducing control over when tenancies end, timing disposals to minimise CGT exposure will become increasingly complex.

The Incorporation Dilemma

Many landlords have already considered transferring their properties into limited company structures, which still benefit from full mortgage interest deductions as a business expense. However:

• Transferring property triggers both CGT and Stamp Duty Land Tax, potentially wiping out the short-term tax benefits.

• Incorporation should only proceed after careful financial modelling and professional tax advice.

Inheritance Tax (IHT) and succession planning

Property portfolios held personally can be exposed to 40% IHT on estates exceeding the nil-rate band. With longer tenancies limiting flexibility to sell or gift properties, succession planning must start early—through trusts, gifting strategies, or restructuring ownership.

2. The Renters’ Rights Bill: The End of “No-Fault” Control

Goodbye Section 21

The upcoming Renters’ Rights Bill (RRB), expected to take effect in 2026, will abolish Section 21 “no-fault” evictions and convert most tenancies into rolling periodic contracts.

While the policy aims to enhance tenant security, it will create new challenges for landlords:

• Reduced flexibility over when to sell or renovate properties.

• Extended notice periods and a heavier reliance on fault-based possession grounds.

• Potential complications when aligning tenancy end dates with tax planning or portfolio adjustments.

Financial impact and cashflow management

The Bill is also expected to cap advance rent payments and tighten rules on rent increases, limiting landlords’ ability to smooth income or manage cashflow.

For self-managed landlords, that means more variable income and potentially less liquidity for repairs, insurance, or loan repayments.

A new era of transparency

As digital tax submissions and tenancy reforms intersect, HMRC will gain unprecedented visibility into rental income and property ownership. That’s likely to trigger increased compliance scrutiny, particularly for landlords who self-report without professional oversight.

3. Planning for 2026: Steps to Take Now

1. Review ownership and structure

If incorporation, gifting, or trust arrangements could reduce your tax exposure, get advice early. Once new tenancy laws are in force, regaining possession for restructuring may become far harder.

2. Modernise record-keeping

Adopt MTD-compliant accounting software now. Systems like Xero, QuickBooks, and Hammock can integrate rental income, expenses, and property performance, creating a seamless audit trail and preparing you for HMRC’s quarterly digital reporting regime.

3. Assess portfolio liquidity

Consider your cashflow buffers. With new limits on rent increases and advance payments, ensuring that your portfolio can handle short-term gaps or rental arrears will be critical.

4. Strengthen legal and financial partnerships

Solicitors, accountants, and mortgage brokers who understand the upcoming changes can make the difference between a compliant, efficient business and a costly scramble.

At NetRent, our upcoming series dives into each of these areas in detail:

• Law for Landlords explores possession, tenancy reform, and compliance.

• Insurance for Landlords covers protecting rental income amid tighter regulation.

• Mortgages for Landlords examines how lenders are adjusting criteria for limited companies and portfolio owners.

5. Start succession planning

For landlords thinking long-term, early action can reduce IHT liabilities. Trusts, corporate structures, or gradual gifting strategies can ensure continuity across generations—something much harder to achieve once tenants gain indefinite occupancy rights.

4. The Competitive Edge: Becoming a “Professional Landlord”

The direction of travel is clear: landlords will increasingly need to operate as fully-fledged businesses rather than passive investors.

Those who embrace digital systems, strategic tax planning, and robust legal governance will not only remain compliant but gain a competitive edge as smaller, unprepared landlords exit the market.

2026 isn’t just a deadline—it’s a defining moment for the rental sector. By acting now, landlords can future-proof their portfolios, protect income, and preserve long-term value.

NetRent’s Advisory Note

NetRent does not provide legal advice. This article reflects our understanding of rental property law and taxation as of publication. Landlords should always seek professional guidance tailored to their personal circumstances.

Contact us for more insights and landlord resources:
📞 Telephone: 01352 721300
📧 Email: support@netrent.co.uk