Landlords face fresh decisions over rental returns as Budget widens tax gap
Summary
A new IMLA report says the Autumn Budget’s further increase in tax on rental income will materially reduce post-tax returns for individual landlords holding properties in their own names from 2027/28. The report suggests this may accelerate a shift towards limited company ownership, although landlord responses will vary depending on borrowing, yields, capital growth expectations and restructuring costs.
Why it matters
Changes in landlord tax treatment can influence investment behaviour, portfolio structure and the supply of private rented homes. Surveyors involved in valuation, investment advice and landlord transactions may see knock-on effects in demand, pricing and ownership patterns.
Key points
- Rental income tax rates for individual landlords rise further from 2027/28.
- The tax gap between personal ownership and company ownership widens.
- Some landlords may consider transferring or selling properties, but stamp duty and CGT can be barriers.
- IMLA says landlord decisions will depend on yields, borrowing and capital growth expectations.
- Any supply impact for tenants will depend on how many properties remain in the PRS.
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