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This August, one story from the “kite-flying” rumour mill was about what the Chancellor might do with property taxes come her Autumn Budget.
This summer, there have been a series of leaks about possible tax rises which could be included in Reeves’s next Budget.
Understandably, politicians and policy advisers want to take the temperature on their ideas, particularly over the summer, when their bosses are on holiday and journalists have pages to fill. But all of this prospecting for public opinion comes at a cost.
Since these kites started flying, Pryor says his clients have been constantly “emailing, calling and WhatsApping” him to ask “what the implications of the latest nonsense being reported are”.
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“We are not talking about non-doms here,” Pryor stresses. “We are talking about people who want to plan for 2026 or 2027 – it’s about people’s lives and where they put the pillows they will lie their heads on at night.”
Regardless of the respective merits and pitfalls of adding NI to landlords’ tax bills or replacing stamp duty and council tax with a more comprehensive property tax, Pryor has a point. The risk is that all of this uncertainty spooks landlords and gives them time to increase rents (the Renters’ Rights Bill will make it harder to do this when it becomes law) while they can to protect themselves from higher taxes.
Stamp duty has a huge impact on what I’m able to do next in my life. I’d like to sell my one-bedroom flat and buy a home where I can have a family because, at the moment, even my boyfriend won’t fit. But if stamp duty stays as it is, the options in my current area are somewhat limited. An annual tax, however, might change things.
But there is a balance to be struck. This is a delicate game which involves giving people just enough information, in just the right amount of time, but not allowing the story to take on a life of its own.
In the vacuum of information, right-wing newspapers are already describing a potential annual property tax as a “mansion tax”, which may or may not be the case. There’s every chance that a new taxation system would be fairer, but without proper information, how it would work in practice is anyone’s guess.
Landlords will never like the idea of paying NI on rental income. However, it strikes me that landlords want buy-to-let investment to be respected as work. All workers pay NI, including tenants who must also pay rent. So, if landlords don’t want to pay it, they must come up with a compelling argument as to why?
Indeed, as I’ve written, economists on both the left and the right support council tax and stamp duty changes.
Are you struggling with your council tax bill? I’d love to hear from you. Please email vicky.spratt@theipaper.com
Reeves does need to reform property taxes. Both because it’s an important source of revenue for the Treasury and because the current system penalises buyers, fails to incentivise downsizing and completely ignores renters. But, if she does it, she must reform very, very carefully.
Vicky’s pick
While away, I chose to delete Instagram and X from my phone and opted, instead, to consume the news via the four main television channels. I watched local and regional news every evening and, if I stayed awake long enough, also Newsnight.
I also read several books, including The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era by historian Gary Gerstle. If you’re interested in the transfer of economic power to private markets and deregulation that took place from the 1970s onwards, this book is for you!
Whenever I visit Cornwall, I opt to stay in a hotel as opposed to an Airbnb if possible because, as I’ve written, hotels support local economies by employing people in a way that Airbnbs do not. This time, I stayed at The Scarlet in Mawgan Porth. That wasn’t a press stay, it’s just a brilliant, locally owned eco hotel.
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