NI on landlords would wipe out profit for 58% of higher rate taxpayers
Extending NI to landlords’ rental income would hit individuals, comprising 81%* of market
· 58% of higher-rate paying landlords would face tax bills exceeding 100% of profits
· Policy risks shrinking rental supply and pushing rents higher
The Intermediary Mortgage Lenders Association (IMLA) has warned that extending National Insurance (NI) to landlords’ rental income would have serious unintended consequences for smaller personal landlords operating in their own names.
Such a move would not apply to incorporated landlords, creating a two-tier system that would widen the gulf between individual and corporate property owners. For many smaller landlords, already squeezed by recent tax and regulatory changes, the impact could be devastating.
The proposal, floated as part of pre-Budget speculation, could push many landlords’ effective tax rates to unsustainable levels. IMLA’s research shows that 58% of higher-rate taxpayers letting properties in their own name would face total tax and NI bills exceeding their entire rental profit and would be paying more than 100% back to the Treasury.
Landlords have already been hit by the loss of mortgage interest relief, higher capital gains tax bills, a stamp duty surcharge and an increasingly demanding regulatory environment. Imposing NI on top could further reduce the number of buy-to-let properties, which has already fallen by more than 110,000 since 2022, and drive up rents as supply continues to contract.
IMLA’s analysis, published in its latest report The November Budget 2025: Surveying the Options, concludes that while extending NI to landlords might raise around £2.2bn annually, the damage to rental supply, market confidence and tenant affordability would far outweigh the benefit.