12/11/2025
What National Insurance on Landlord Income Could Mean for You
An update from Ross & Sons Estate Agents
Recent analysis by Hamptons has highlighted the potential impact on landlords if National Insurance Contributions (NICs) are introduced on rental income – a measure reportedly under consideration by HM Treasury ahead of the Chancellor’s November Budget.
At present, landlords who hold property in their personal name pay income tax on rental profits, but no National Insurance. However, leaked proposals suggest that rental profits could soon be subject to NICs at 8% up to £50,270 and 2% thereafter, mirroring the system used for employment earnings.
Crucially, early indications suggest NICs may be applied to pre-mortgage profits, which could create a significant strain on landlords already facing rising costs.
What this could mean in real terms
Hamptons’ briefing reveals that:
A typical landlord earning £16,478 in rental income and paying £7,875 in mortgage interest would see their total tax bill more than double – rising from £699 to £1,609.
A higher-rate taxpayer would see their bill increase from £2,973 to £3,200, leaving as little as £295 in actual profit once tax is paid.
Who would be most affected?
According to the analysis, the changes would hit:
Younger landlords below pension age, who are not exempt from NICs
Unincorporated landlords (around 80% of the market)
Lower-income landlords, especially those relying on rental income to supplement earnings or pensions
Meanwhile:
Landlords over state pension age would be exempt from the new charge
Incorporated landlords would remain unaffected
A deeper squeeze on profitability
Hamptons warns that applying NICs before mortgage interest relief could mean that higher-rate taxpayers may pay tax on loss-making properties, particularly those with high mortgage costs or limited equity.
Unlike Section 24 – which mostly affected higher-rate taxpayers – this change could disproportionately impact lower-income and younger landlords, many of whom have smaller equity buffers and higher borrowing costs.
How much revenue would this raise?
Although the Resolution Foundation originally estimated the reform could raise £3 billion annually, Hamptons suggests the realistic figure is closer to £1 billion, given that around 40% of landlords are likely to be exempt.
Don’t let sitting tenants or new legislation stand in your way.
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