Landlords have claimed that HM Treasury plans to charge National Insurance (NI) on rents is a raid on millions of people’s pensions.
The National Residential Landlords Association (NRLA) points out that the proposed 8% tax levy on rental income will impact the 42% of landlords who in recent polling cited ‘a contribution to a pension’ as the reason for renting property out.
This is inherently unfair, the organisations claims, because no other type of pension pays NI on funds or income created by investments.
It is also claimed that the mooted NI levy would also be a tax on savings and investment because a further 42% of landlords say they chose property over bonds or shares on which NI is also not levied.
The organisation’s Chief Executive Ben Beadle (pictured) has also questioned HM Treasury’s data on landlord wealth, which has claimed that most landlords earn gross incomes of £50,00 to £70,000 even though national statistics show the average is £19,200.
The effect of all of this will be to make providing homes to rent less attractive as an investment and, the NRLA claims, many landlords may well decide they can get a better and more secure return on other types of investment.
“It will be tenants who ultimately will suffer from higher rents and less choice as demand for rented housing continues to increase,” it says.
Beadle adds: “Further punitive tax hikes on the rental sector will lead only to rents going up, hitting the very households the Government wants to protect.
“It would come on top of last year’s increase to Stamp Duty on homes purchased to rent and proposals expecting landlords to pay up to £15,000 on energy efficiency improvements to properties.
“Analysis by Savills shows that up to one million new rental homes will be needed by 2031 to meet demand. Given this, the Chancellor should be using the tax system to encourage long term investment in new good quality rental housing.”
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