Tax bills to double for younger landlords if Reeves imposes NI on rent income
Tax bills for typical landlords will double if Chancellor Rachel Reeves (main picture) introduces National Insurance on rental income, according to Hamptons.
In a briefing note ahead of this month’s Budget, the London agency also warns that the move will hit younger landlords under pension age the most.
Hamptons rates National Insurance on rental income as one of the ‘more likely’ changes the Chancellor could make.
Tax bill double
“Our analysis shows that a typical landlord earning £16,478 annually in rental income and paying £7,875 in mortgage interest, would see their tax bill more than double – from £699 to £1,609,” it says.
And “a higher-rate taxpayer would see their tax bill rise from £2,973 to £3,200, leaving just £295 in profit”.
One-third of landlords are over state pension age and would be exempt, while incorporated landlords would remain unaffected, Hamptons says.
Cliff edge
Capital Gains Tax on high value primary homes has a ’medium likelihood’ of happening, according to Hamptons.
A threshold at £1.5 million could create “a cliff edge in the market”, with “sellers pricing just below the limit to avoid tax, and buyers steering clear of homes that might tip them over”.
A Mansion Tax also has a ‘medium likelihood’ Hamptons believes. The most impacted would be owners and renters occupying £2m+ homes, mainly in London and the South.
Less likely
Less likely is an Annual Property Tax replacing Stamp Duty and Council Tax, with homeowners in wealthier markets likely to be worse off.
It would be collected by HMRC rather than local authorities, and 17% of households nationwide would pay more under a 0.48% annual tax.
And Stamp Duty shifted to sellers is also rated as ‘less likely’.
Help to Buy 2.0 is considered to be a ‘medium likelihood’, with adding a higher council tax band ‘more likely’.
The post Tax bills to double for younger landlords if Reeves imposes NI on rent income appeared first on The Negotiator.
Author: Gemma
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