UK (Parliament Politics Magazine) – Chancellor Rachel Reeves faces backlash over the proposed landlord tax, which could raise rents, burden tenants, and spark concerns from industry experts.
As reported by The Standard, Rachel Reeves faces criticism for her “Baldrick-style” plans, as the Treasury’s proposed landlord tax threatens rising rental costs.
Treasury officials are reportedly planning to apply national insurance to landlords’ rental income before the autumn budget.
The government aims to generate £2bn through higher property levies while Ms Reeves searches for cash solutions.
What did Kirstie Allsopp say about Rachel Reeves’s landlord tax?
Property expert Kirstie Allsopp compared the Chancellor to Baldrick, highlighting the risks in her economic strategies.
She said,
“This is economically destabilising. It’s literally like having the economy run by Baldrick.”
Ms Reeves stated,
“She keeps on coming up with the cunning plans and she needs to go and sit in a corner and think about how to save money and improve the economy, not constantly be taking money from people because this will impact tenants.”
What did Ben Beadle say about tax hikes affecting tenants?
Ben Beadle, chief executive of the National Residential Landlords Association, stated,
“Further punitive tax hikes on the rental sector will lead only to rents going up, hitting the very households the Government wants to protect.”
He said,
“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.”
Mr Beadle highlighted Savills’ data showing Britain will need one million extra rental homes by 2031.
He stated,
“Given this, the Chancellor should be using the tax system to encourage long-term investment in new, good-quality rental housing.”
What did Tom Bill say about landlord taxes hurting tenants?
Tom Bill, head of UK residential research at real estate consultancy Knight Frank, stated,
“Targeting landlords won’t lose the government many votes, but such moves invariably end up hurting tenants.”
He added,
“With landlords already selling up ahead of the Renters’ Rights Bill and tougher green regulations, another disincentive would reduce supply further and put upwards pressure on rents. Those that stay may pass on the extra costs in other ways.”
What did Stephen Morgan say about Rachel Reeves’s landlord tax plans?
Education Minister Stephen Morgan declined to comment on reports of a national insurance hike on rental income.
He said,
“Obviously taxation policies are a matter for the chancellor of the exchequer, and she will set out more detail in the budget later this year. I want to make sure that our budget is based on our Labour values, and that is what Rachel Reeves will deliver.”
Mr Morgan stated,
“It’s not for me to comment on speculation. Our focus is on driving growth in the economy and delivering for working people up and down the country.”
He added,
“We’re focused on growing the economy. Fixing the foundations of the country, restoring public service and that decade of national renewal. I’m afraid you will have to wait until the budget is later this year.”
What did Adam Corlett say about taxing landlords fairly in Reeves’ budget?
Adam Corlett, principal economist at the Resolution Foundation, stated,
“With tax rises clearly coming this autumn, the chancellor should use this as an opportunity to make the tax system fairer and more efficient.”
He stated,
“One way to achieve this is to ensure different forms of income are taxed at the same rate, for example, by levying national insurance on income from rental properties. After all, there’s no good reason why landlords should face lower tax rates than their tenants.”
What did the Treasury say about boosting finances without raising taxes?
A Treasury spokesperson said boosting the economy is key to stronger public finances, adding,
“Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms, which are expected to grow the economy by £6.8 billion and cut borrowing by £3.4 billion.”
They added,
“We are committed to keeping taxes for working people as low as possible, which is why at last autumn’s budget, we protected working people’s payslips and kept our promise not to raise the basic, higher or additional rates of income tax, employee national insurance, or VAT.”
How could Rachel Reeves’s landlord tax raise £2 billion without breaking Labour’s pledge?
Rachel Reeves’ allies say the proposed landlord tax aligns with Labour pledges, applying to a broader income base rather than raising existing rates.
National insurance contributions for employees are set at 8%, reducing to 2% over £50,270.
Treasury officials aim to raise revenue without breaching “red lines” limiting Reeves’ budget. The proposed landlord tax could bring in roughly £2 billion for the Treasury.
The NIESR economic think tank has warned of a looming £41 billion shortfall. The autumn budget may struggle to balance public spending with tax receipts. Her self-imposed fiscal rules for 2029-30 appear at risk.
Housing target of the Labour government
Labour aims to build 1.5M homes, but has added only 186,600 so far. £39B is allocated for social and affordable housing, including 180,000 social rent homes.
New social homes are exempt from Right to Buy for 35 years. Shortages and planning delays put the target at risk.