With less than two weeks to go, the outline of Rachel Reeves’s second Autumn Budget is starting to become clearer. For months, leaked stories about mansion taxes, capital gains on main homes and pension raids have dominated the headlines and spooked the market. Now they appear overcooked.
A sweep around the papers shows that a more measured and consistent story is beginning to emerge from Downing Street. From The Times and FT to The Telegraph and Guardian, the briefings now point in the same direction: target the top end, reward work, and tighten reliefs rather than radical changes. So, what is now likely to be in the budget?
Council tax: reform via the existing system
The idea of a full national revaluation, once heavily trailed, now looks unlikely. Treasury sources quoted in The Times say the cost, complexity and political fallout make it almost impossible during this Parliament.
Instead, ministers are expected to use the current council tax framework to raise extra revenue by adjusting the multipliers on Bands G and H, or by introducing new “super-bands” above them. Several national papers are reporting that doubling the Band H multiplier alone could generate around £4 billion a year, affecting about one million homes – mostly in London and the South East.
For high-value homeowners and landlords, that would translate into thousands of pounds in extra annual costs. It’s reform by stealth, which is quick to implement, legally straightforward, and easy to present as fair.
Tax shift: work rewarded, wealth reweighted
Across the press, the same theme keeps coming up, again and again: reward work, rebalance wealth and target those with ‘the broadest shoulders’. According to current briefings, the Treasury is considering a 2p rise in income tax alongside a 2p cut in employee National Insurance.
On paper, that sounds neutral, but it isn’t. People in work would see little change or a modest gain, while those who don’t pay NI, such as landlords, pensioners and investors, would face higher bills. It’s a structural shift that moves the tax burden from earnings to ‘unearned’ income.
Recent analysis by Hamptons highlights just how significant this could be. Its data shows that applying National Insurance to rental income would almost double the typical landlord’s tax bill, with younger investors hit hardest because they are more likely to hold property in their own name. For many, an NI charge could wipe out up to 10% of their annual rental profits.
The change is now being widely described as being “under active consideration” inside the Treasury. Nothing is confirmed, but the message is clear: passive income is in Rachel Reeves’ crosshairs.
Pensions: the 25% question
The familiar 25% tax-free pension lump sum, which is worth £4 billion a year to savers, is back in the budget equation. While a full withdrawal of the tax break looks unlikely, Citywire and The Times both report that a cap for larger pots – potentially between £100,000 and £150,000 – is being examined.
For many investors, this is more than a retirement issue. Pension withdrawals often provide capital for property purchases or portfolio expansion, and any cap would tighten that flow of investment funds. Once again, the Government appears to be focusing on adjustment rather than abolition.
Capital Gains Tax: what’s off the table, and what’s not
A number of national titles are also reporting that taxing gains on main residences is no longer under consideration, with officials accepting it would freeze housing mobility and be politically untenable.
However, investment property remains firmly under the spotlight. Sources quoted by The Times and FT Adviser suggest that the Treasury is reviewing reductions to the CGT allowance, currently £3,000, and potential alignment of CGT rates with income-tax bands. Both would be simple to deliver and could raise significant sums without the need for new legislation.
For landlords who are planning on disposing of any of their assets, the timing of it could soon matter more than ever.
Housing and regeneration still on the agenda
Alongside the need for fiscal tightening, the Chancellor is also under pressure to show progress on housing supply. Although the 300,000-homes-a-year target remains on paper, the emphasis is now shifting towards deliverable regeneration.
Recent reports point to an increasing focus on build-to-rent, brownfield development and infrastructure-linked projects in regional cities such as Leeds, Manchester and Birmingham. These are expected to be packaged as “growth initiatives” – signalling political intent without requiring major new spending.
The direction of travel
The national press may differ in tone, but the substance is consistent:
Council tax rises are likely to target Bands G and H.
Income and NI changes will tilt the system towards workers.
Pension and CGT reliefs could tighten at the margins.
Big reforms are off the table – for now.
This is not a Budget of revolution, but of fine-tuning, its balance shifting, quietly and deliberately towards wealth, property and unearned income.
