Government Insists Property Tax Rise Will Have Little Impact on Rents

Editor's note: This brief was summarised by The Property AI Team from a report by Property118. Read the original article for full details.

Government Insists Property Tax Rise Will Have Little Impact on Rents

The government claims a two-percentage-point tax rise on property income would have only a small impact on rents. Chancellor John Healey announced in the Budget that tax rates on property and savings income will increase by a further two percentage points from April 2027.

According to Property118, the Budget announcement adds to the rise announced by Rachel Reeves last year. The government's position is that the two-percentage-point increase on property income will have only a small impact on rents.

What This Means for Letting Agents and Inventory Clerks

For letting agents and inventory clerks, the key takeaway from the Property118 report is the government's stated expectation that the tax rise will have little effect on rents. The report does not set out how the government reached that conclusion, nor does it include any additional measures or commentary beyond the Budget announcement itself.

The tax change applies to property and savings income, with the further two-percentage-point increase due to take effect from April 2027. This follows the rise announced by Rachel Reeves last year, meaning landlords face a cumulative increase in tax rates on property income.

Limited Detail in the Source Report

Property118's report is brief and does not include responses from landlord bodies, letting agent associations, or other industry stakeholders. It also does not provide specific figures on expected rent impacts, nor any modelling or analysis supporting the government's claim. Agents and inventory clerks should therefore treat the government's assertion as a stated position rather than a confirmed outcome.

The report does not indicate whether further detail on the policy or its expected effects will be published. Letting agents and inventory clerks may wish to monitor future announcements for clarification on how the tax rise will be applied and what, if any, additional guidance emerges ahead of April 2027.