Nothing dramatic happened to UK buy to let. What happened was a sequence of individually reasonable changes that, stacked, turned a leveraged small landlord's business into a much thinner one. Most of the people leaving are not angry. They have just run the numbers again.
Here is what actually changed, with dates, and what the money tends to do next.
The short version
| Mortgage interest deduction | Gone since April 2020. Replaced by a 20% credit |
| Property income tax rates | Rising 2 points on 6 April 2027, to 22/42/47% |
| Stamp duty surcharge | 5%, up from 3% on 31 October 2024 |
| Section 21 no-fault eviction | Abolished 1 May 2026 |
| Energy standard | Dual-metric EPC C equivalent by 1 October 2030 |
| Cost cap for that work | £10,000 per property |
| Capital gains tax on sale | 18% or 24% |
Section 24, which is the one that did the damage
Before 2017 a landlord deducted mortgage interest from rental income and paid tax on the profit. Section 24 of Finance (No. 2) Act 2015 ended that. Phased in from April 2017 and fully in force from 6 April 2020, finance costs are no longer deductible. Instead you get a tax reduction worth the basic rate, currently 20 percent, of your finance costs.
For a basic rate taxpayer this is roughly neutral. For a higher rate taxpayer it is not, because you are now taxed on rental income before interest, then given credit at 20 percent against a 40 percent liability.
The subtler damage is that your taxable property income is now a bigger number than your actual profit. That inflated figure is what pushes people into the higher rate band, past the child benefit charge threshold, or past the personal allowance taper. Landlords who never considered themselves higher rate taxpayers discovered they were.
"Finance costs" is broad: mortgage interest, interest on loans taken out to buy furnishings, and the fees for taking out or repaying those loans.
Then rates went up, twice
The stamp duty surcharge doubled in effect. From 31 October 2024, buying a property that leaves you owning more than one attracts a 5 percent surcharge on top of standard SDLT, up from 3 percent. On a £250,000 flat that surcharge alone is £12,500, and it is paid on day one out of capital, before a single month's rent arrives.
Property income tax rates rise on 6 April 2027. Rates on property income go up two percentage points to 22, 42 and 47 percent. The Section 24 credit rises to 22 percent alongside them, which softens the edge without removing it. This is legislated, not proposed.
Section 21 is gone
The Renters' Rights Act 2025 received Royal Assent on 27 October 2025 and its first phase came into force on 1 May 2026. Section 21 no-fault eviction is abolished. Assured shorthold tenancies are replaced by assured periodic tenancies, so a tenant can stay indefinitely unless the landlord establishes a legal ground to end it.
Whatever you think of the policy, the practical effect on a landlord's position is straightforward: recovering possession now runs through grounds and evidence rather than a notice and a date. Section 21 notices validly served before the cutoff had a long-stop court application date of 31 July 2026, which has now passed.
And there is a bill arriving in 2030
Following the 2025 consultation, the government confirmed it will raise the minimum energy efficiency standard for privately rented homes in England and Wales. Privately rented homes must meet a dual-metric standard by 1 October 2030: a fabric performance metric, plus either a smart readiness or heating system metric at the landlord's choice.
- Spending is capped at £10,000 per property, or 10 percent of value for properties under £100,000
- The government's own impact assessment estimates average spend near £5,400
- Legislation is intended to come into force in 2027
- Spend counts toward the cap from 1 October 2025
- There is no earlier deadline for new tenancies. Everything lands on the same date
For a modern flat this is often nothing. For the Victorian terraces that make up a lot of small portfolios, it is a real capital call on a fixed date, and it arrives whether or not the yield supports it.
Selling has its own bill
Capital gains tax on residential property is 18 percent within the basic rate band and 24 percent above it. Unusually, residential property rates did not rise when the main CGT rates went up in October 2024; they were already at that level.
So the exit is not free either. That is precisely why some landlords who want out are still in: the decision is not "is buy to let good", it is "is buy to let good enough to justify not paying the CGT yet".
Where the money goes
Some of it rolls into a limited company, where interest remains deductible against corporation tax. That is a genuine answer, though it brings its own costs, and moving existing property into a company is a disposal for CGT and a fresh SDLT charge including the surcharge.
Some goes into equities and pensions, which is the boring correct answer for many people.
And some goes abroad, looking for the thing UK buy to let used to have: rental income you keep most of, without a licensing regime and a compliance calendar attached.
What Georgia looks like by comparison
We should be honest about which of these is a fair comparison and which is not.
Genuinely better:
- No purchase tax and no stamp duty. The state registration fee is a flat charge measured in tens of dollars. There is no surcharge, no distinction between your first property and your fifth, and no higher rate for non residents
- 5 percent flat tax on rental income for registered individuals, against 42 percent at the UK higher rate from 2027
- No capital gains tax after a two year hold
- No landlord licensing, no minimum energy standard, no equivalent of Section 21 reform to plan around
- Registration in days, sometimes the same day, against weeks of UK conveyancing
- A residency route from $150,000, which is not something UK property offers at all
Genuinely worse, and it matters:
- Liquidity. Georgia is a market of under four million people. If you need to sell quickly you will feel that in a way you never did in Manchester
- Currency. You are earning lari and thinking in sterling, with a dollar-denominated market in between
- Distance. Managing a tenancy from 2,000 miles away is a different job, and the agent doing it is not regulated the way a UK agent is
- Country risk. Georgia's long term alignment is genuinely uncertain. That is a real risk and nobody can price it for you
And one thing that is not better: HMRC does not stop caring. While you are UK resident you are taxable on worldwide income. Georgian rental income goes on the foreign pages of your self assessment return, and the double taxation agreement gives you a credit for the 5 percent paid, not an exemption. Budget for the difference. Our guide to buying property in Georgia from the UK sets out the reporting side properly.
If you are actually considering it
Check the title before anything moves. Georgia's public registry records ownership, mortgages and seizures, it is open to anyone, and you do not need to be in the country or hold a Georgian ID to read it. Never accept a screenshot from an agent, because an image is trivially editable and a lookup is definitive. Our title check guide explains what the fields mean, and the scams foreign buyers fall for covers the specific patterns.
Then read what the 5 percent regime actually involves, because it requires registration and is not automatic, and the buying costs calculator for the itemised numbers. If you are weighing several countries, every country still granting residency for a property purchase is the wider comparison.
You do not need to fly out to buy. Our remote purchase guide explains the power of attorney route, and more importantly how to write one narrowly enough that it cannot be misused. Whether you should buy sight unseen is a separate question, and for resale stock the answer is usually no.
This article is general information, not tax, legal or investment advice. UK figures are current as of August 2026 and several of the changes described take effect later. Speak to a UK qualified adviser about your own position, and to a Georgian lawyer before committing funds.