Campaigns Finance and Taxation Reform

Challenging the myth: Two thirds of landlords pay basic rate tax

Sally Walmsley
Written by Sally Walmsley

Two thirds of individual landlords are only liable for the basic rate of income tax according to data released by the government.

The Residential Landlords Association (RLA) says that it challenges the myth that landlords are wallowing in vast sums of money and so can cope with tax rises.

According to the figures obtained in response to parliamentary questions from DUP MP, Jim Shannon, of the just over 1.9 million unincorporated individual landlords returning a self-assessment tax return, two thirds were in the basic rate bracket, thirty per cent were in the higher rate band and four per cent paid the additional rate.

The Treasury Minister, Mel Stride MP, also confirmed that landlords are taxed more than homeowners, noting that they pay tax on their rental income, extra stamp duty and capital gains tax unlike home owners.

This kills off once and for all assertions made by the former Chancellor, George Osborne, that tax rises on private landlords were about ‘levelling the playing field’ with home owners.

Although, in another answer the Treasury re-asserts that it estimates only one in five landlords will be affected by the reduction in mortgage interest relief, it confirms that it has no idea how many properties, and therefore tenants, will be affected by this additional cost pressure.

The figures come after David Miles, a former member of the Bank of England’s Monetary Policy Committee, recently warned that tax rises on the private rented sector will serve only to “cost” tenants.

Given that the need for more homes to rent is more acute than ever, the RLA is calling for the government to scrap the decision to tax a landlord’s turnover, rather than profit, abandon the mortgage interest relief changes and to no longer apply the stamp duty levy on additional homes where a property is adding to the supply of housing available to rent.

RLA Policy Director, David Smith, said: “The previous Chancellor increased taxes on the private rented sector based on what are now clearly false assumptions.

“It is especially worrying that Ministers cannot tell how many properties, and therefore tenants, could potentially be adversely affected by their policies.

“We need more homes to rent to meet growing demand. It is time that the tax system encourages rather than stopped housing growth cold dead.”


In all 1,254,ooo landlords are paying the basic rate of tax, 584,000 the higher rate and 82,000 the additional rate.

About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Magazine and Digital Editor for the NRLA. With 20 years’ experience writing for regional and national newspapers and magazines she is responsible for editing our members' magazine 'Property', producing our articles for our news site, the weekly and monthly bulletins and editorial content for our media partners.


  • Yes the gov line lacks credibility.
    They say it’s levelling things with other investments but that’s not true as CGT on proeprty remains at a different rate from stocks and shares for example.

    In my case I’m currently a lower rate tax payer. I’ve saved hard all my life and have a circa 15 k pension payable in 2019. The pension will push me into higher rate and I have calculated that once MIR is fully implemented I will pay circa £4000 at result of only receiving 20% relief. Effectively this feels like this is being taken away from my pension that I’ve worked so hard for.

    I can’t see the fairness in the current policy and feel the thinking is very flawed

  • Whilst factually I assume the 2/3 figure is correct, I am not convinced the full picture is being portrayed. I suspect that a fairly sizable number of these 2/3 20% tax payers are husband or wife to a spouse who is probably earning a good income from other sources and paying 40%+ tax on those incomes, thus the household income is well above average. The rental income is good way to use the tax allowance of a house wife/husband.

    • Like Gary I am currently a basic rate taxpayer who is due a pension in 2019 which under the full S24 rules will push me into being a higher rate one, if I did nothing. Luckily one of my properties is a former home which I can sell with little CGT, using the equity and the tax free lump sum to pay down most of the mortgages in my own name.

      Several report have shown that over 70% of landlords have just one property. One using data from 20010 showed that the median total rent was £500. Since there has been little growth over much of the country that figure is probably not too far out now.

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