Landlords could have to pay national insurance payments based on rental income under leaked plans being considered by Chancellor Rachel Reeves.<\/p>\n
National Insurance contributions are charged at 8% on employee income, but earnings from property, pensions and savings are largely exempt.<\/p>\n
The government is looking to raise money to plug the so-called \u00a340bn black hole in public finances, but is hamstrung by pre-election promises not to raise VAT, income tax or NI on \u2018working people\u2019.<\/p>\n
Rising rents could be the consequence for such a change, said Ben Beadle, chief executive of the National Residential Landlords Association.<\/p>\n
Beadle said: \u201cFurther punitive tax hikes on the rental sector will lead only to rents going up, hitting the very households the government wants to protect. It would come on top of last year\u2019s increase to stamp duty on homes purchased to rent and proposals expecting landlords to pay up to \u00a315,000 on energy efficiency improvements to properties.<\/p>\n
\u201cAnalysis by Savills shows that up to one million new rental homes will be needed by 2031 to meet demand. Given this, the Chancellor should be using the tax system to encourage long term investment in new good quality rental housing. She should also heed the advice of the Committee on Fuel Poverty and reform the tax system to support investment in energy efficiency improvements.\u201d<\/p>\n
Timothy Douglas, head of policy and campaigns at Propertymark, further emphasised how such a move could further diminish the supply of private rental properties for tenants to choose from.<\/p>\n
He said: \u201cLandlords in the private rented sector have been impacted significantly by tax changes in recent years, such as reduced rates of mortgage interest relief and increased rates of property tax when purchasing a buy-to-let or expanding their portfolios.<\/p>\n
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\u201cThe UK government must understand the impact of these changes before embarking on further tax reforms that ultimately push up rent prices and reduce the number of much-needed properties to rent. Further tax imposition will mean less revenue for the Exchequer because it will drive landlords away from the market.<\/p>\n
\u201cWe need policies that ensure the private rented sector can increase supply to meet the demand for homes to rent, making rents more affordable. This is the only way to improve the housing market for renters, and secure increased revenue for public services.\u201d<\/p>\n
The question is whether the government would go through with such a change, as it\u2019s common for governments to leak plans to gage the public mood before making a move.<\/p>\n
While targeting landlords may be popular with a selection of voters, it the outcome of dwindling rental supply would surely prove to be less popular unless there\u2019s significant social housing supply to plug the gap.<\/p>\n
Tom Bill, head of UK residential research at Knight Frank, said: \u201cTargeting landlords won\u2019t lose the government many votes but such moves invariably end up hurting tenants.<\/p>\n
\u201cWith landlords already selling up ahead of the Renters\u2019 Rights Bill and tougher green regulations, another disincentive would reduce supply further and put upwards pressure on rents.<\/p>\n
\u201cThose that stay may pass on the extra costs in other ways. Governments need to fully appreciate that when you tax an activity, you get less of it.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Landlords could have to pay national insurance payments based on rental income under leaked plans being considered by Chancellor Rachel Reeves. National Insurance contributions are charged at 8% on employee income, but earnings from property, pensions and savings are largely exempt. The government is looking to raise money to plug the so-called \u00a340bn black hole […]<\/p>\n","protected":false},"author":1,"featured_media":3102,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-3101","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-second-home"],"yoast_head":"\n