Landlords face rental income tax bill of £885 per property
The latest analysis from Inventory Base reveals that UK landlords face an average NI bill of up to £885 per property per year if Labour’s rental tax proposal is passed into law.
The Government is considering a major change to the way landlords are taxed, with Chancellor Rachel Reeves weighing up plans to apply National Insurance (NI) contributions to rental income as part of her upcoming Autumn Budget. The proposed rate is likely to be 8%.
Now, Inventory Base has calculated that the average UK landlord (who is an employed individual) could be hit with an annual NI bill of £722 per property. This is based on an 8% NI tax on average gross annual rental income of £10,621, minus the average property maintenance cost of £1,593 per year*.
Landlords in London will face the biggest NI bill of £885 per property, based on post-costs rental income of £11,060, while in the East of England, landlords are looking at an average tax bill of £802 a year.
In the South East, where rental income after maintenance expenses averages £9,900 per property, the average cost of the proposed tax stands at £792, followed by the South West (£750), North East (£684), East Midlands (£680), West Midlands (£677), North West (£646), Wales (£608), and Yorkshire & Humber (£606).
Sián Hemming-Metcalfe, Operations Director at Inventory Base, commented:
“Landlords are already trying to guesstimate and juggle any potential financial fallout of the Renters’ Rights Bill, so slapping an NI charge on rental income feels less like policy and more like punishment.
The private rental sector thrives on stability – tenants need secure homes, landlords need predictable returns. Add another layer of tax and all you create is uncertainty, and uncertainty drives good landlords out of the market. That doesn’t protect tenants, it weakens an already fragile system. If the Government is serious about raising standards, it should be focusing on ways of maintaining the protections and standards that tenants are being promised and backing landlords to deliver, not taxing them into retreat.”
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