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14/7/25 8:13 pm
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The government has revealed that 2.4 million landlords will have to pay more in property tax by the end of this Parliament.
Following Chancellor Rachel Reeves’ announcement of a property basic rate at 22%, higher rate at 42% and additional rate at 47% from April 2027, its policy paper explains: “It is estimated that by 2029 to 2030, 2.4 million landlords (6% of taxpayers in 2029 to 2030) will face an increase in tax as a result of this measure.
“Administratively this measure will affect individuals (including partners in partnerships) with profits from property rental income. It is anticipated that both the one-off and ongoing administrative burdens for these individuals will be negligible. The only one-off costs will be familiarisation with the change.”
While the rules apply to England, Wales and Northern Ireland, the government has promised to give the Scottish and Welsh governments the ability to set devolved property Income Tax rates. As ONS figures suggest there are about 2.82 million landlords in the UK, the majority will be affected.
It says older investors will be most impacted, while those from an Asian, Asian British or Indian ethnic background are estimated to be overrepresented in the population affected by the property rate increase (4.8%) compared to the UK adult population (2.8%). People from the Hindu faith are also estimated to be overrepresented (2.9%) compared to the UK adult population (1.5%). It explains: “This reflects that people from this group are more likely to have taxable income from property.”
While the government aims to narrow the gap between tax paid on work and tax paid on income from assets, many predict a calamitous impact on the PRS. Simon Gammon, founder and managing director of mortgage brokers Knight Frank Finance, told The Independent that Reeves’ announcement would be the “last straw” for many landlords, forcing them to sell up.
“I think it will really only hit people when they get their tax bills,” says Gammon. “So that will be 2026 or 2027.”
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