Business · Economy · 4 hrs ago
Landlords warn Budget tax rise could push up rents
The UK Budget adds 2 percentage points to landlords’ income tax rates on rental income from April 2027.
Basic-rate taxpayers will pay 24%, higher-rate taxpayers 44%, and additional-rate taxpayers 49%, compared with 20%, 40% and 45% today.
The increase comes after a separate 2 percentage-point rise imposed last year.
Landlords say the higher tax could lead them to raise rents for tenants.
Manchester landlord Harry Johnston says he plans to increase rents, while East Midlands and East of England landlord Mark Imray plans to sell at least half of his properties in the coming years.
Landlords also face a 5% stamp duty surcharge on property purchases and rules that make evictions harder and restrict rent rises, adding to concerns about the future of the UK buy-to-let sector.
Landlords say a 2 percentage point income tax rise announced in the Budget will lead them to raise rents or sell properties.
The increase will take effect from April 2027, according to the Daily Mail.
Basic rate taxpayers will pay 24 per cent tax on rental income, up from 20 per cent today.
Harry Johnston, who owns 40 flats in Manchester, said he would increase rents.
Mark Imray said he plans to sell at least half of his properties in the coming years.
- Who
- Landlords, including Harry Johnston and Mark Imray.
- What
- Landlords say a 2 percentage point income tax rise will prompt rent increases and property sales.
- When
- The increase is due to take effect from April 2027.
- Where
- The UK; Johnston owns flats in Manchester, while Imray lets properties in the East Midlands and East of England.
- Why
- Landlords say the tax rise will increase their costs. The sources report their view that this could lead to higher rents and sales.
This story does not have two clearly opposing sides.
A 2 per cent income tax increase was imposed, according to the Daily Mail.
The Budget included a further 2 per cent income tax rise for landlords.
The new tax rates are due to take effect.
- Income tax rise
- 2 percentage points
- Basic rate tax on rent
- 24 per cent from April 2027, up from 20 per cent
- Harry Johnston's portfolio
- 40 flats in Manchester
- Mark Imray's planned sales
- At least half of his properties in the coming years
2 sources
What people are saying
Landlords are always in the firing line. We appear to have become the cash cow – but it is just going to result in higher rents.
The Government is discriminating against smaller landlords, many of whom are just hard-working people who have bought two or three properties to support them in retirement.