The chancellor Rachel Reeves has just announced that she will increase basic and higher rate of tax on property, and savings income by 2 percentage points points from April 2027.
“I will ensure that the wealthiest will contribute the most,” she said.
She adds that 90% of tax payers will not pay tax at all on their savings.
It is estimated that the increase in the tax rates on dividends, property and savings income by 2% will raise £2.1bn.
Adam Jennings, head of lettings at Chestertons, said: “Increasing income tax for landlords could have dire consequences on the rental market. More landlords could decide to sell up which will result in fewer available rental properties and leave more renters struggling to find a property within their budget.”
Ben Beadle, chief executive of the National Residential Landlords Association, commented: “Despite claims of tackling cost of living pressures, the Government is pursuing a policy that the Office Budget Responsibility has made clear will drive up rents.
“Almost one million new homes to rent are needed by 2031. But this Budget will clobber tenants with higher costs while doing nothing to improve access to the homes people need.”
Oh dear, yet another tax on aspirations.
And, of course, it won’t put rents up….will it?
I do hope the industry fights against this. It seems we are all better off on welfare.
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The problem also being that any increase in rent can be put to the Rent Officer and I can’t recall the last time a tribunal agreed the rent increase. Rent increases will be defended as tenants are made aware of the new legislation. The back door to rent control.
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I’ve never had a rent increase go to a rent officer or tribunal, and I’m not entirely sure of how a tenant would do it or what the procedure is!
I had someone say they were going to, but I then assume that they looked at the increase, looked at what it would take their rent to, what was available at that price and what a similar property to theirs would rent for, and backed off. Even with the 3% increase, they were still WELL below market value, as they had been there for about 10+ years, with minimal increases at a very low starting rent.
After that, the Landlord decided that all increases on his portfolio would be in line with inflation at that time, or whatever the Fair Rent increase was, whichever was higher. They were not happy at being accused of greed when they were trying to keep the rents low and just cover costs…
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