Property income taxes will rise by 2% from April 2027, bringing the rate to 22%, 42% and 47% for basic, higher and additional rate taxpayers respectively.<\/p>\n
William Reeve, chief executive, Goodlord, said: \u201cThe 2% tax hike\u2026 risks leaving renters facing the prospect of rent hikes as the landlords that remain aim to cover their losses.<\/p>\n
\u201cThis was already something a large section of landlords were considering in response to the Renters\u2019 Rights Act, so this could compound the threat of rental cost rises for tenants and contribute to higher inflation.\u201d<\/p>\n
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Emma Cox, managing director of real estate at Shawbrook, said: \u201cWhile the government has announced a 2% tax increase in property income, most professional landlords operating via a limited company will be breathing a sigh of relief that rumoured, punitive changes were not announced.<\/p>\n
\u201cThough economic uncertainty and market volatility have posed challenges over the past 12 months, landlords have proven themselves to be agile and able to withstand pressures.<\/p>\n
\u201cWhile house prices continue to fluctuate, the promise of accelerated housebuilding and the lack of additional taxes will encourage professional landlords to seek further opportunities and add to their portfolios over the coming months.<\/p>\n
\u201cContinuing to diversify property types, shifting towards assets such as semi-commercial property and HMOs, will continue to be an effective strategy for those looking to maximise yields and ensure their businesses are robust against any sudden market changes.\u201d<\/p>\n
John Angus is managing director at Switch Management, a property management company that provides housing to vulnerable families.<\/p>\n
He said: \u201cFor landlords, this represents another significant increase in the tax burden at a time when the sector is already under strain.<\/p>\n
\u201cMany landlords were already reconsidering their position following the Renters\u2019 Rights Act. This additional tax burden risks making continued investment unviable for some, accelerating market exits just as demand intensifies.<\/p>\n
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Lee Murphy, managing director of The Accountancy Partnership, said: \u201cIt was something that had been predicted for a while, but the announcement from Reeves that investment income will now be taxed more heavily than wages will mean that property investors will face a huge shift in landscape.<\/p>\n
\u201cThis change will increase the cost of holding and profiting from a property, and many landlords will need to review their portfolios and consider restructuring to remain tax-efficient.<\/p>\n
\u201cIt\u2019s another clear signal that the government is prioritising earned income over passive returns, which is likely going to dampen investor appetite in the property market.\u201d<\/p>\n
Mark Hughes, specialist property expert at Pure Property Finance, said:\u00a0\u201cReeves introducing this new approach risks discouraging property investment, reducing rental supply and could potentially drive up huge costs for tenants.<\/p>\n
\u201cMany landlords are already facing rising interest rates and compliance burdens, and this additional tax pressure could force them into leaving the market.<\/p>\n
\u201cProperty investment underpins housing stability and long-term wealth creation, whereas penalisation undermines both. A balanced tax system should encourage growth, not push out those that\u2019re going to provide homes and support the wider economy.\u201d<\/p>\n
Matt Hutchinson, director of flatshare site SpareRoom, said: \u201cIt\u2019s right to want to level the playing field but there\u2019s a knock-on effect that hasn\u2019t been thought through. There\u2019s a very real risk landlords facing reduced profit margins will pass this on to tenants by increasing rents, which are already at record highs.<\/p>\n
\u201cFor landlords, who are already grappling with what the Renters\u2019 Rights Act means for them, this could well be the straw that breaks the camel\u2019s back, pushing more to leave the market at a time when we desperately need rental stock.<\/p>\n
\u201cDriving landlords out the sector in the middle of a supply crisis that\u2019s keeping rents unaffordably high helps no-one, least of all renters.<\/p>\n
\u201cTenants have no protections from market volatility and too many people spend 40-50% of their income on rent. People can\u2019t take much more. To do this now could be terrible timing when the rental market is already in such a state of flux.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Property income taxes will rise by 2% from April 2027, bringing the rate to 22%, 42% and 47% for basic, higher and additional rate taxpayers respectively. Reaction William Reeve, chief executive, Goodlord, said: \u201cThe 2% tax hike\u2026 risks leaving renters facing the prospect of rent hikes as the landlords that remain aim to cover their […]<\/p>\n","protected":false},"author":1,"featured_media":5920,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-5919","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-second-home"],"yoast_head":"\n