Propertymark wants the UK Government to commit to a comprehensive review of landlord tax changes, with the Autumn Budget due later today. It is also seeking greater certainty for landlords and homeowners, and a housing policy that supports investment, affordability and the supply of homes.
The sector will be looking for clarity on tax and the wider housing market, Propertymark says. Successive Budgets have changed how property is taxed, leaving landlords, homeowners and businesses unsure about the costs they face and where policy is heading.
Last year’s Budget prompted months of anxiety and anticipation across the sector, which Propertymark argues shows why stability matters when decisions on property investment and ownership play out over many years.
Cumulative costs for landlords
The private rented sector houses millions of households, and successive tax changes have altered the costs and risks of investing in property. Restrictions on mortgage interest tax relief, higher Stamp Duty surcharges on additional properties and the cost of maintaining and improving homes all shape landlords’ decisions.
Propertymark wants the UK Government to review the cumulative tax burden on private landlords, rather than considering each tax in isolation. The review would cover:
- Income Tax
- mortgage interest relief
- Capital Gains Tax
- additional-property Stamp Duty charges
It should also look at differences between individual and corporate ownership, the treatment of reinvestment and improvements, and how tax affects landlords’ decisions to enter, remain in or leave the market.
Propertymark argues that a stable, proportionate system would give landlords more confidence to invest and help protect the supply and choice of homes for renters. The UK Government must weigh the wider consequences of landlord tax changes, it adds, rather than focus on individual measures.
Energy efficiency
Propertymark supports improving the energy efficiency of the UK’s housing stock, but says targets must be realistic, avoid a one-size-fits-all approach and come with practical financial assistance. Retrofitting can demand substantial upfront investment, particularly in older homes.
The body wants the UK Government to restore and expand tax incentives for energy-saving improvements, including the Landlord’s Energy Saving Allowance, and to consider VAT relief on eligible works. Clear information on grants, loans and other funding would also help landlords and homeowners plan improvements without placing unnecessary pressure on the supply of rental accommodation.
Local Housing Allowance
Propertymark continues to call for Local Housing Allowance rates to cover at least the cheapest 30% of local market rents, backed by an annual uprating guarantee.
When housing support falls behind rents, lower-income households face greater financial pressure and fewer options for suitable accommodation. Restoring rates to the 30th percentile and keeping them in step with local rental markets would help tenants meet housing costs and support access to the private rented sector.
Stamp Duty and new property taxes
Stamp Duty Land Tax in England and Northern Ireland can create a significant upfront cost for buyers, potentially discouraging people from moving, downsizing or finding a home that suits their needs. Propertymark wants a review of its rates and thresholds, including whether they have kept pace with average wages and house prices across the country.
The body welcomed the announced Your First Home scheme, which aims to offer eligible buyers deposits as low as 2.5% on participating new-build properties. However, it argues that support must extend beyond new builds. Reducing upfront barriers for buyers of existing homes could stimulate transactions and wider economic activity across the housing market.
The proposed High Value Council Tax Surcharge also calls for a joined-up approach, Propertymark says. With a planned threshold of £2 million for residential properties in England, the charge could affect households differently depending on regional property values and their ability to pay.
Propertymark wants the UK Government to consider regional disparities, household incomes, appropriate protections and how the surcharge interacts with existing property taxes. Together, it adds, these measures should form part of a wider assessment of how taxation affects decisions to buy, sell, rent, invest and downsize.
Calling for a long-term plan
The UK Government has announced reviews and commissions in other policy areas, and Propertymark believes housing deserves the same approach. It wants an evidence-led review of the taxes and costs affecting property ownership, investment and occupation, with particular attention to the cumulative impact on private landlords, instead of further isolated changes made without assessing their combined effects.
Propertymark wants the review to include:
- clear terms of reference
- engagement with the sector
- a published timetable
A stable and proportionate tax framework, it argues, would support investment, help people move when their circumstances change and strengthen the foundation for improving housing supply, energy efficiency and affordability. Propertymark wants the UK Government to use its Budget plans to commit to understanding what the existing system delivers, where it creates barriers and how it can be improved.
