# Landlords face new tax hit as rents set to rise

> Chancellor John Healey has announced a further two percentage point tax increase on rental income from April 2027, prompting warnings of higher rents for tenants across the UK.
- Title: Landlords face new tax hit as rents set to rise | Shortify
- Summary: Chancellor John Healey has announced a further two percentage point tax increase on rental income from April 2027, prompting warnings of higher rents for…
- Keywords: labour, john healey, property tax, landlords, rental market, housing policy, renters, budget 2024, politics, news, face, tax
- Source: The Independent — https://independent.co.uk/news/uk/home-news/budget-landlord-property-tax-rent-prices-labour-b3075559.html
- Published: 2026-10-29T15:50:18+00:00
- Read time: 1 min
- Topics: labour, john healey, property tax, landlords, rental market, housing policy, renters, budget 2024, politics, news
## Chancellor raises tax on rental income
Chancellor John Healey confirmed that rental income will be subject to a further two percentage point tax increase from April 2027, adding to an identical announcement made by his predecessor Rachel Reeves last year.
## Tax surcharge will reach four points
The tax surcharge on property income will be four points higher from April 2027 as a result of both announcements combined, in a move the National Residential Landlords Association said had made life harder for…

> made life harder for renters right across the country
## Rents already rising, now may go higher
Under current forecasts, rents are already expected to rise by four per cent over the next year, adding seven hundred pounds to the average annual bill for tenants.
## Budget watchdog warns of rent spiral
The Office for Budget Responsibility warned that the increased tax burden will reduce rental supply and cause remaining landlords to push up their prices, leading to a steady rise in rents.

> leading to a steady rise in rents
## Landlords plan rent rises and sales
Research for the National Residential Landlords Association found that forty-six per cent of landlords planned to increase rents over the next twelve months, with thirty-five per cent planning increases larger than previously planned.
## Some experts expect smaller rent impact
Hannah Aldridge at the Resolution Foundation said price rises are likely to be small because rents track earnings and landlords already charge the highest rent possible.

> likely to be small as rents tend to track earnings
## Housing benefit freeze leaves gap unfilled
Housing groups expressed disappointment that the chancellor did not address frozen housing benefit rates. The shortfall between housing benefit and the bottom thirty per cent of local rents reached a record high of twenty-three point…
## Key takeaway

Labour's decision to raise property tax on landlords by two percentage points from April 2027 is expected to drive up rents and reduce rental supply, with the Office for Budget Responsibility warning of steady rent increases.