The additional 2% tax slapped on landlords by Chancellor Rachel Reeves last week has been welcomed by anti-landlord activists – but even that isn’t enough to win their support for the overall package.
The Renters’ Reform Coalition (RRC) – an alliance of students, housing and renter activist groups – has condemned the government’s refusal to increase Local Housing Allowance in the Budget last week.
Tom Darling, director at the coalition, says: “Overall, this is not a renters’ budget – the continued freezing of housing benefit means tenants on low incomes will continue to struggle to keep a roof over their head while paying for the essentials. Soaring rents are a major cause of homelessness, driving renters out of their homes or into poverty, and refusing to increase housing allowance means many families will remain trapped in emergency homelessness accommodation, unable to afford to move.”
Thanks to Reeves’ Budget, landlords’ income tax from property income will increase by 2% from April 2027, a move which the Office for Budget Responsibility (OBR) has recognised will hit landlords in the pocket and force rents up.
The basic, higher and additional rates will increase to 22%, 42% and 47% respectively, a move that could add between £20 and £25 per month to typical rents in England. It comes on top of changes to Mortgage Interest Relief and Stamp Duty which have already increased landlord costs and hit profits.
Despite its reservations about the Budget, the Renters’ Reform Coalition has welcomed tax changes affecting landlords and the end of the two child benefit cap.
Darling continues: “Many renters will benefit from other changes announced … like the end of the two-child benefit cap, and we welcome tax changes like the mansion tax and increasing taxes on property income. It’s only right that those with the broadest shoulders – which in England usually means those who own multiple properties – should bear more of the load. Landlords should be taxed at the same rate as their tenants who work to pay the rent.”
This article is taken from Landlord Today