Property income tax rise to affect tenants as well as landlords
A Gloucestershire based shared living marketplace platform says we’ll start to see rent rises
The founder and CEO of COHO, a Gloucestershire based shared living marketplace platform says the government’s budget announcement to raise property income tax is ultimately a tax on tenants.
Vann Vogstad says finding affordable properties to rent will become harder with landlords potentially being forced to sell off unprofitable properties: “It will be the tenants as well as landlords who pay the price for the Chancellor’s move to increase Property Income Tax by 2% by April 2027.
“Landlords have become an easy political target and now they will be faced with an additional 2% on basic, higher and additional rates, taking these rates to 22%, 42% and 47% respectively.
“For nearly a decade, property investors have operated with little to no profit surplus. Raising taxes on rental income, especially when coupled with the upcoming Renters’ Rights Bill reforms, will inevitably result in higher rents.
“That’s just basic economics, and it will be the tenants who pay the price.”
He added: “An investment must make sense financially, and when costs rise, so do rents unless tenants simply cannot afford them.
“In those cases, landlords will be forced to sell.
“This won’t necessarily help renters onto the property ladder though, as demand for housing remains strong and prices are unlikely to fall meaningfully. Instead, we’ll see more properties acquired by large corporate landlords, who tend to prioritise shareholder value over tenant wellbeing.”
He continued: “People often rent out of choice or because they can’t afford a deposit on a mortgage.
“Unlike home ownership, renting supports mobility, lets people move quickly for work, removes the burden of major upkeep, and, in shared living, gives people the connection and support that comes from living with others.
“But undermining landlords’ viability risks reducing choice and flexibility for renters.
“The sector needs predictability and incentives to invest in better homes, not policies that drive out those committed to quality and community.”