Why Labour’s despicable landlord tax raid will punish tenants

That’s now 24% on deemed profit that might not even exist thanks to Section 24. Meanwhile incorporated Landlords get off scot-free yet again.

Got me that did when he said this is why we decided to protect income tax & go for Property tax instead.
Hang on a minute, do we not pay Income Tax?
Not enough newsreaders have challenged him on that Renters will pay for this. He’s made them worse off.

You right, we can’t plan ahead when they constantly revising the sums retrospectively.

And if someone can do the sums, the 49% tax, the extra 4% tax is somewhat more isn’t it with Section 24.

Reply to the comment left by Gromit at 30/10/2026 – 10:19
Yep, it is their desired goal to remove all accidental landlords.

George Osborne should have created a mechanism to allow people to incorporate without CGT or stamp duty when section 24.

Forcing everyone into companies is not the best economic decision though. I like to move between my properties when empty. But cannot do so when in a ltd company.

Yet another widening of the gap between social and private tenants. We have working people in social housing paying half of the rent of benefit tenants in the private sector.
It’s a triumph of hateful ideology.
Make sure you tell your tenants why their rent is going up again. All business costs have to be passed to the end user, same as in any business.

Same House, Three Times the Tax

29 Oct 2026 ·Hugh and Claude ( Claude is my AI friend)

Landlords have been hit again. In November 2025 the government announced a 2% rise in income tax on rental profits from April 2027. The Budget of 28 October 2026 added a further 2%, taking the rates to 24%, 44% and 49%. At the same time, regulation has grown ever more complex, and under the Renters’ Rights Act councils can fine a landlord up to £40,000 for a single serious breach, penalties many landlords see as out of all proportion to those in other walks of life.

Each measure is presented as a cost to landlords. But a landlord’s only income from a house is its rent, and if letting is to stay worthwhile, the rent has to cover the tax. The government’s own forecaster, the Office for Budget Responsibility, warns that the latest rise could push rents up over the long term. In the end, it is the tenant who pays.

The result: a rented home is taxed more than three times as heavily as the same house lived in by its owner, and the renter pays for it through the rent.

That gap is rarely stated plainly. Debate about renting focuses on rent levels and the shortage of homes, while the tax built into every rent gets little attention.

One house, two tax bills

Take a four-bedroom house in Gosforth, Newcastle, bought for £425,000 and sold 15 years later. Over that time it raises about £273,000 in tax if it is let, against about £82,000 if its owner lives in it.

Tax over 15 years

Owner lives in it

Let to tenants

Stamp duty on purchase

£11,250

£32,500

Council tax

£62,000

£62,000

Income tax on rent

none

£114,000

Capital gains tax on sale

none

£45,000

VAT on fees and repairs, insurance tax

£9,000

£19,000

Total

£82,000

£273,000

Average per month

£456

£1,514

In the let column, council tax includes about £2,500 the landlord pays while the house stands empty between tenancies. Assumptions: bought without a mortgage, rent starting at £1,800 a month, house prices and rents rising 3% a year, council tax Band E, and a landlord who pays the higher rate of income tax, at the new 44% rate from April 2027. With a basic-rate landlord, the let figure is about £209,000, still two and a half times the owner’s.

Paid for through the rent

The landlord writes the cheques to HMRC, but the money has one source: the rent. A landlord must make a return or stop letting, so over time the tax on a rented home is reflected in what tenants pay.

In our example, the tax on the rented house averages about £1,514 a month. Around £330 of that is council tax the tenant pays directly. The rest is income tax, capital gains tax, stamp duty and VAT that the landlord must recover from the rent. The owner-occupier in the identical house pays about £456 a month.

The owner also pays no tax when they sell, on a gain of about £237,000 in our example. One household builds up wealth untaxed; the other carries three times the tax and builds up nothing. Higher rents also make it slower to save a deposit, so renters stay renting for longer.

The usual justifications

Two arguments are usually made for the difference. Neither explains a gap this large.

Encouraging home ownership. People do not need encouraging to buy. Most renters want to own; they simply cannot afford to.
Landlords are investors and should be taxed like any other. But the house serves the same need either way. It is a home, not a share certificate, and for many people renting is not a choice.
Renting has a proper place where people choose it, for example students, people on short contracts or those new to an area. For those who rent because they choose to, or because buying is out of reach, a heavier tax on the home they live in is hard to defend.

No quick fix

Tax is not the whole story. The housing market cannot work properly until supply roughly matches demand, and building enough homes will take years.

Tax reform also needs care. Simply cutting landlords’ tax while homes are scarce could push house prices up, as investors outbid first-time buyers. The aim should be to tax owning and renting more evenly, from both sides:

tax real gains, above inflation, on all homes alike, whether owned or let
lighten the tax on rental income, so landlords earn their return from rent rather than speculation
reform stamp duty, which taxes people for moving home
phase changes in alongside house building, and apply them to future gains only
The case for change

A rented home is taxed more than three times as heavily as an owned one, and renters pay for it through their rent. Each new tax and penalty aimed at landlords adds to that burden, and it falls on those who have not been able, or choose not to buy.

There is no simple or quick resolution, not least because we lack enough homes. But that is a reason to plan reform now, not to keep adding to the burden. A home is a necessity, and the tax on it should be the same whoever owns it.

Reply to the comment left by Hugh Baily at 10:47
You write a lot of sense. I used to work as a chartered accountant until I went full time into property 25 years ago. The problem I find in this country is that too many people don’t seem to understand maths. Property taxes are stupidly complicated and when you try to explain anything to someone that doesn’t “live the numbers” their eyes just glaze over.
You couldn’t explain the issues in a radio program for example because a good working example like yours would take too long to explain.
I feel that the only way I can explain is by slowly selling up, as a lot of other landlords seem to be doing, and hoping that housing issues really get bad in the country and people finally get it. Obviously that would be a bit of a hollow victory!

all true. BUT THEY DON’T ACTUALLY CARE. Why let reality get in the way of political ideology and income envy?

Labour know they wont get re-elected so want to F this country for whoever comes after them.

They don’t actually care as long as their own money is coming and and I’m sure well protected.

Awaab’s Law if applied to the PRS will finish off PRS landlords be their properties in their personal name or in an Ltd.

We had the ability to scupper all this in 2018.

Reply to the comment left by JamesB at 30/10/2026 – 11:05
You’re absolutely right. Mention tax and eyes glaze over, and I’d be curious to know how many people read past the first table.

Perhaps the way through isn’t more numbers but a few plain questions. Using the same Gosforth example:

To the tenant who rented that house for 15 years:
“The home you lived in carried about £190,000 more tax than it would have if you’d owned it, around £1,000 a month, and that tax has to come out of your rent. Does that surprise you? Do you think it’s fair?”

To the landlord who let it:
“You paid about £213,000 in tax on your tenant’s home. Had it been taxed like an owner-occupier’s home, it would have been about £20,000. Do you agree that your tenants need all the help they can get, and that fairer tax would mean better value for them and a more competitive private rented sector?”

To the politicians:
“Your own forecaster, the OBR, warns that your latest tax rise could push rents up. Do you accept that taxing landlords this heavily means higher rents for tenants who can least afford them?”

It looks to many of us like the line of least resistance. Taxing owner-occupiers the same way would be political suicide, so landlords take the hit. And the constant vilification of landlords hides where the cost really lands: on tenants. It also hides the real reason we’re in this mess. Successive governments have failed to build enough homes.

As for selling up, I understand the temptation, but as you say it would be a hollow victory. The first to suffer would be the tenants we’re arguing for. Better to keep asking questions that anyone can answer.

Reply to the comment left by Hugh Baily at 14:31
I think your first line to the tenant about the amount of tax their rental carried would be quite hard hitting for them and certainly get a lot more attention. “yes, the landlord paid it, but all they really did was collect it from you to pay over on your behalf”.
In fact, I am not sure why Shelter, and Generation Rant and their ilk aren’t making your point. Maybe you should contact them and labour the point writing as “disgruntled tenant”.