If Treasury proposals currently circulating are confirmed, buy-to-let landlords could soon face a new national insurance (NI) charge on rental income. The idea appears speculative at this stage, but Chancellor Rachel Reeves is under pressure to find revenue, and landlords are seen as an easy target.
Currently, rental income falls outside the main pillars of UK tax: income tax, NI and VAT. Bringing it into scope would mark a significant shift. While standard NI rates are 8% on earnings up to £50,270 and 2% above that, reports suggest the Treasury is considering a more minor surcharge of 1% and 3%, similar in scale to the stamp duty supplement on second homes.
The Treasury has refused to comment, sticking to the line that tax policy changes are only confirmed at a Budget. The Autumn Statement has been set for 26 November 2025.
The idea has drawn comparisons with George Osborne’s reforms in April 2017, which removed many of the tax advantages of buy-to-let, including mortgage interest relief.
Some worry that any new levy would likely be passed on to tenants through higher rents, worsening affordability in a strained market.
The proposal would be straightforward for HMRC to administer. Rental income is declared annually through self assessment, and from April 2026, landlords with income over £50,000 will be required to file quarterly updates under Making Tax Digital for Income Tax. This would give the Government even greater oversight of potential revenues. Treasury insiders reportedly believe an NI surcharge on property income could raise as much as £2 billion. However, whether that figure refers to a single year or the entire parliamentary term up to 2029 is unclear.
Questions over fairness and consistency
Tax experts warn that treating rental income like earnings without extending the same benefits would be inconsistent. Other experts have floated alternative reforms, such as revisiting mortgage interest relief to create a fairer system without destabilising the rental market.
Wider tax pressures ahead
The speculation follows other recent reports of potential changes affecting property owners, including removing capital gains tax relief on high-value primary residences and higher stamp duty on sales over £500,000. Such measures would disproportionately affect homeowners in London and the South East, where prices are significantly higher.
With a reported £50bn budget gap to fill, landlords may be just one of several groups targeted. The property sector, already strained by rising mortgage costs and surging rents, is bracing for further changes when the Chancellor delivers her autumn statement.
Looking ahead
The Treasury is considering ways of raising additional revenue from rental income, with speculation that a National Insurance levy could generate around £2bn a year. Early estimates suggest landlords with mid-range rental profits could increase annual tax bills by over £1,000 if the measure goes ahead.
While no official policy has yet been announced, and details will only be confirmed at the Budget, the possibility of such a shift means landlords should keep a close eye on developments and consider how different ownership or structuring options may affect their position.
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