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14/7/25 8:13 pm
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The government clearly feels that landlords earn their money ‘unfairly’ - hence they have created a standalone tax rate that is aimed at taking more from their pockets than ‘working people’. Is this decision based on a desire to penalise individuals who have inherited property and who, in the government’s opinion, ‘have not earned it’?
This new tax hike catches all private landlords whether they have saved money to purchase the property (at which point they will already have paid income tax) or not. So is the government really saying, ‘sell the property and go and get a normal job and you’ll earn more of your income?’ Because that’s what it feels like and what many landlords will actually do, thereby reducing stock and tenant choice.
The new rate of tax is applied to net income after repairs, insurance and management costs (if you use a letting agent), so fortunately for many landlords the actual direct hit will be less than the headlines suggest. But I’m concerned that the government has now effectively separated property income taxation from general income taxation and created a new tax entirely. I suspect this will allow the Chancellor to slowly raise this tax at subsequent budgets.
In the government’s opinion, landlords are not working people which paves the way for it to carve landlords out of any manifesto commitments going forward. This is not a good day for hardworking landlords.
The new ‘mansion tax’ on higher value properties means that many properties in London and the South East will now be hit with a new punitive charge. Based on the – unproven - assumption that everyone who lives in a high value property has enough income to pay for the new charge, will their local services improve? Will bins still be collected twice a month instead of weekly? Will there be more police patrolling the areas to reduce crime? I doubt it, which is why I feel the surcharge is unfair.
The proposed reduction in energy bills and other announcements around investment are welcome but the devil is in the detail, and it will take a few days for the full implications of this Budget to come to light.
Eddie Hooker is CEO of mydeposits
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