With the Autumn Budget approaching, there is growing speculation that the government may introduce changes to how property income and transactions are taxed. Among the rumours are proposals to extend National Insurance contributions to rental income and to replace stamp duty with a property tax on homes valued above £500,000.
While no decisions have yet been confirmed, these potential measures have raised concerns across the property industry, particularly about how they could affect landlords, tenants, and the wider housing market.
National Insurance on Rental Income: Impact on the Private Rented Sector
If National Insurance were applied to rental income, experts suggest that many landlords would face higher operating costs, which could result in rising rents for tenants.
Industry commentators have warned of a possible “double impact”:
- Landlords may pass additional tax costs on to tenants through increased rents; or
- Some may choose to sell their properties, reducing rental supply at a time when demand remains high.
A reduction in available rental homes could place further upward pressure on rents, potentially making it harder for tenants to find affordable accommodation. For those hoping to save for a deposit to buy their first home, rising rents could make it even more challenging to put money aside each month.
Possible Replacement of Stamp Duty
Alongside the rental income tax discussions, reports also suggest that stamp duty could be replaced with a new property tax applied to sellers of higher-value homes rather than buyers.
While shifting the tax from buyers to sellers may appear to make home ownership more accessible — especially for first-time buyers, property experts caution that the outcome may not be so straightforward.
If sellers at the upper end of the market face higher tax liabilities, they may be discouraged from moving, resulting in fewer family homes being released and a reduced flow of properties across all price brackets. This could limit choice and slow the market overall, even if upfront costs for buyers fall.
Possible Instalment Options for Stamp Duty
There has also been speculation that buyers could, in future, pay stamp duty in instalments rather than as a single lump sum. While this could ease immediate financial pressure at the point of purchase, it may also add an ongoing monthly cost, potentially reducing overall affordability for first-time buyers.
What This Could Mean for EMPO Members
For landlords and letting agents, these potential policy shifts highlight the continued importance of financial planning and communication with tenants. If additional costs are introduced, transparency and fairness will be key in maintaining trust and stability within the private rented sector.
For estate agents, understanding how possible tax changes could influence buyer and seller behaviour, especially at different market levels, will be crucial in advising clients and managing expectations.
EMPO will continue to follow updates closely in the lead-up to the Autumn Budget and provide members with accurate, impartial guidance as more details emerge.