Landlords are not taxed more favourably than owner-occupiers – and it is time policymakers stopped pretending otherwise. That’s the hard-hitting message from leading economist Paul Johnson in the latest episode of the NRLA’s flagship podcast Listen Up Landlords.
Johnson, provost of Queen’s College, Oxford and former director of the Institute for Fiscal Studies, tore down the long-standing narrative that landlords benefit from generous tax treatment, branding it “complete nonsense.”
“The first myth to bust is the idea… that somehow landlords are under-taxed relative to owner-occupiers, which is complete nonsense,” he told podcast hosts.
“If you make it more expensive to be a landlord, then there will be some combination of fewer landlords and higher rent.”
His warning comes at a critical time, with rumours swirling of fresh tax grabs in the forthcoming Budget. Johnson cautioned that squeezing the sector further will only shrink supply and push rents up – the very outcome tenants and landlords alike are desperate to avoid.
Short-Termism vs Long-Term Strategy
Johnson was withering in his criticism of the Government’s “kite-flying” approach, with constant speculation about reforms to Capital Gains Tax, Stamp Duty and even National Insurance Contributions. Instead, he called for a root-and-branch review of housing taxation.
In particular, he singled out Stamp Duty Land Tax as unfit for purpose:
“It’s probably the worst tax that we have, and if I were chancellor for the day, I would abolish it.”
Such comments echo what the NRLA has been telling ministers for years: without a clear and consistent long-term tax strategy, landlords cannot plan or invest, and renters will continue to pay the price.
NRLA Response
NRLA chief executive Ben Beadle welcomed Johnson’s intervention as a powerful endorsement of the association’s campaigning work.
“Ahead of the Budget the Government must heed Paul Johnson’s sage advice. Too often the way rental property is taxed is based on nothing more than topping up the coffers from one year to the next. Such knee-jerk and short-term thinking is no way to run an economy.
“What is needed is a consistent tax strategy that gives responsible landlords the confidence to invest in the decent long-term homes for rent that so many people desperately need.”
The Bigger Picture
With demand for rental housing surging and supply falling, the sector cannot afford more political short-termism. The message from Johnson – and from the NRLA – is crystal clear: if the Government keeps using landlords as a convenient cash cow, tenants will be the ones left to pick up the bill.
To hear the full interview with Paul Johnson – including his expert take on the latest tax rumours and what reform could look like – listen to the latest episode of Listen Up Landlords, available now via the NRLA.