Jul

Not so rich after all! Official data shows 70% of private landlords pay basic rate tax

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New government figures show that more than two-thirds of landlords pay the lower rate of income tax – a picture far removed from a sector full of rich investors painted by some housing campaigners.

Treasury minister Lord Agnew of Oulton revealed the numbers declaring income via self-assessment for letting property in 2019/20 showed that 1,519,000 landlords paid the basic rate of tax, 560,000 paid the higher rate of 40% and 106,000 paid the additional higher rate of 45%.

He was responding to a Parliamentary question from Lord Carrington.

Lord Agnew (pictured) added that the figures didn’t include certain categories of BTL property owners including Scottish taxpayers, those with income below the £1,000 property allowance, those with property income between £1,000 and £2,500 who would declare this via PAYE, and some who did not fall into any of the tax bands as their income would be within their personal allowance.

Lord Agnew added: “During the pandemic, the government has put in place a substantial financial package, backed up by billions of pounds, which is supporting renters to sustain tenancies and to afford their housing costs.

“The government is supporting landlords by providing tenants with extensive financial assistance to continue paying rent.”

He said the forthcoming Better Deal for Renters was designed to help the rental market work better for both tenants and landlords.

Last year, Rentround’s survey of 20,000 landlords showed 20% of landlords were looking to leave the sector, while 33% were unsure about their future.

They blamed uncertainty around property prices post Covid-19, concern about future tax hikes and fear of further rent defaults when the furlough scheme ends.

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