A lettings industry supplier reckons the introduction of National Insurance (NI) on private rental income – mooted by some in government – could actually have a silver lining.
Labour is reportedly considering introducing NI on landlords’ rental income at next month’s Budget, a move that could generate approximately £2 billion in revenue.
While no official policy has been announced, reports suggest an 8% NI rate could be applied to rental income, potentially costing landlords hundreds of pounds per property annually. Landlords currently pay NI on their earnings, but not on passive rental income unless it is considered a trade.
However, those landlords over the State Pension age are currently exempt from paying National Insurance contributions, and Reapit reckons the introduction of NI could see an influx of older investors – even if younger ones exit the sector.
Neil Cobbold, commercial director at Reapit, says: “If National Insurance is levied on all rental income but the current exemption for those over State Pension age holds, these investors could see higher net yields than their younger counterparts, making property investment more attractive to retirees. It will be for agencies across the country to sell this potential opportunity to their older landlords in the face of regulatory reform.”
According to the English Private Landlord Survey 2024, landlords with larger portfolios are more likely to be closer to retirement. The survey found that 77% of landlords with five or more properties were aged 55 or over.
This article is taken from Landlord Today