Landlords who thought the incoming Renters’ Rights Bill was the worst they had to prepare for were shocked to discover the Government is mulling over yet more punishing plans for property investors.
A new report commissioned for the Labour Government recommends it scraps the current council tax system and introduce a new, progressive property tax. While on the surface this sounds plausible, the detail is worrying. At present, it is the occupants who pay council tax and this is currently tenants in a rented property.
Under the proposed reforms, it would be the property owner who would be responsible for a new property tax. In lettings, the landlord, not the tenant, would be left to pick up the bill.
The pain doesn’t stop there. Guidance suggests property values should be reviewed annually, for tax purposes, with second homes - including buy-to-lets - automatically taxed at a higher rate. Furthermore, the report details how capital gains tax for second homes and investment properties should be increased.
If you think your portfolio is robust enough to withstand such radical changes to property investment, congratulations as you’ll be in the minority. If you are one of the lucky ones sticking with lettings and have the luxury of even adding buy-to-lets to your portfolio, think again. The report recommends buy-to-let mortgages should be ‘more firmly regulated and restricted’
The full report, entitled ‘Land for the Many: changing the way our fundamental asset is used, owned and governed’ is a window on the future of the private rental sector under Labour leadership. You can read the full report here and contact us if you are considering selling your buy-to-let assets as a result.
Sadly, the above noted report was not the only detrimental news landlords were faced with in August. A leaked document exposed how HM Treasury is also plotting to tax landlords even further.
If the leaked details are true, landlords would be required to pay National Insurance (NI) on rental income. The proposed policy is so appealing that we may hear it mentioned in the Chancellor’s Autumn Budget, which has been scheduled for the end of November.
Forcing landlords to pay NI on rental income is another way for the Government to fill its public finance black hole, which is estimated to stand at £51billion. An NI raid on landlords would raise an estimated £2.3 billion – an amount that is fiscally appealing given the Government debt.
The Chancellor is reportedly also considering abolishing the current capital gains tax exemption for the sale of higher-value homes, which would particularly hit landlords with larger properties and those in London and the South East.
The Autumn Budget will take place on Wednesday 26th November 2025, with the entire property industry waiting with baited breath. Labour has infused the market with a sense of dire insecurity and with yet another Housing Secretary at the helm (Steve Reed), now feels like an exceptionally good time to cut your losses at exit lettings.
National home buyers Open Property Group will make you a cash offer on your buy-to-let so you can sell property fast and achieve completion before the Autumn Budget is delivered. As our average ‘offer to completion’ timeframe is 6 weeks, act now and we will purchase your buy-to-let before new taxes are introduced and before it becomes almost impossible to regain possession of your property.
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