Landlords face renewed National Insurance tax proposal

Landlords already dealing with Renters’ Rights Act compliance deadlines are now facing another tax proposal being resurrected.

The Daily Telegraph reports that the New Economics Foundation is calling for National Insurance Contributions to be extended to landlords’ rent income.

The left-leaning think tank says the current exemption is ‘unwarranted’.

It told the Telegraph that the measure could raise £3.2bn and bring landlords’ contributions closer to those paid by wage earners.

Pay NI for services

George Bangham, the head of social policy at NEF, told the newspaper: “We all expect to pay National Insurance on our wages, in order to contribute to vital services like the NHS.

“But when landlords make money from rental income, they are not asked to contribute the same as everyone else.

“This is clearly unfair: income from renting out a property should be treated the same as income from work.”

The proposal would change the sums behind many buy to let investments if adopted, particularly for landlords already working through higher borrowing costs, tax changes and the new RRA regime.

Tax landlords on profits

NEF has suggested pairing the move with a mortgage interest deduction, so landlords would be taxed on profit rather than revenue.

Property118 reported last year that a similar idea had been floated as part of a wider effort to raise around £2bn from landlords.

At the time, Treasury sources told The Times that the Chancellor, Rachel Reeves, wanted to target ‘unearned income’.

But she also wanted to avoid breaches of pre-election pledges not to increase VAT, income tax or existing National Insurance rates.

Tenants will be hit

Landlord groups have warned that further tax rises would hit tenants as well as investors.

The National Residential Landlords Association says an NI levy would be ‘disastrous’ for landlords and tenants.

It also warns that extra costs could be passed on through higher rents.

Paul Shamplina, of Landlord Action, told the Telegraph that the move could speed up landlords leaving the PRS.

More landlord tax changes

Both Mr Shamplina and the NRLA have pointed to the cumulative impact of tax changes, including a recent 2% income tax surcharge on rent income, as a pressure on margins and future investment.

The tax proposal has returned while landlords face several Renters’ Rights Act deadlines.

The final court deadline for pre-Act Section 21 and Section 8 eviction notices is 31 July 2026.

The Private Rented Sector database is due to begin its regional rollout later in the year, with registration set to become mandatory by 2027.

Compulsory membership of the new Landlord Ombudsman is expected by the end of 2028.

Landlords who miss the requirements could face fines of up to £40,000, adding another compliance risk alongside any future tax change.