The government is considering applying National Insurance contributions to rental income, adding NI on top of existing income tax on rental earnings. Treasury officials estimate the change could raise around £2 billion annually, helping address a £40 billion fiscal shortfall while keeping main VAT, income tax and NI rates unchanged. Rental income is currently exempt from NI; a landlord earning between £50,000 and £70,000 from property could face roughly an additional £1,000 per year. Industry voices warn the measure could squeeze small and medium landlords, destabilise supply and push costs onto tenants, reducing long-term investment incentives.
"This move smacks of political point-scoring rather than sound housing policy. Applying National Insurance to rental income threatens to undermine rental supply by squeezing small and medium-scale landlords, who may pull up stakes or restructure. We're already seeing supply pressures in many areas, pushing costs onto tenants."
"Layering yet another financial burden onto landlords at a time when the rental sector is about to be reshaped risks deterring responsible landlords. The focus should be on stability and encouraging long-term investment, not short-term populism designed to plug holes in the Treasury's coffers."
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