Landlord Tax Rose Again. The Bigger Story Is the Data

Good morning,

If you own a rental property, yesterday’s Budget probably gave you another reason to open your spreadsheet. Then immediately close it.

The government announced another increase in tax on rental income.

But underneath that headline sits something more interesting: plans to give HMRC a clearer, more regularly updated picture of who collects rent, and how much.

Higher taxes get the attention. Better data could change how the rental market operates.

Let’s dive in.

In this newsletter, you'll find...

• First, the tax bit

• So what do you do with this?

• The bottom line

• Feedback

First, the tax bit

From 6 April 2027, the announced property income tax rates in England, Wales and Northern Ireland will be:

• Basic rate: 24%.

• Higher rate: 44%.

• Additional rate: 49%.

That’s another two percentage points above the rates previously announced for next April. The increase still needs legislation.

These are rates on taxable property income, not automatically every pound of rent hitting your account.

Your actual bill depends on your other income, allowable expenses and mortgage-interest relief.

Translation? Don’t multiply your monthly rent by 44% and panic.

But do get your numbers checked before making your next offer.

The announcement you probably missed

HMRC already collects information from letting agents and tenancy deposit protection schemes.

Those schemes are the organisations that safeguard tenants’ deposits.

Currently, HMRC issues more than 10,000 notices each year requesting property income information. Think of a notice as an official “please send us these records” letter.

The proposed change?

Replace those repeated requests with a standing obligation: certain organisations would regularly report agreed information without waiting to be asked.

HMRC is consulting on what gets reported, how quickly, how often, and which tax identifiers should accompany it. Those are reference numbers used to match information to the right taxpayer.

Less chasing paperwork. More consistent information.

Important distinction: this is not a brand-new ability to see rental income. It’s a plan to improve information HMRC already receives.

Now add England’s landlord register

Separately, England is preparing its Private Rented Sector Database.

Terrible name. Fairly simple idea.

A register connecting landlords with their rental properties.

Draft regulations set out a regional rollout beginning in the West Midlands on 15 December 2026. They include property addresses, landlord details, rent information and safety documents.

That means records could show:

• Who the landlord is.

• Which property they rent out.

• What rent is charged.

• Whether relevant safety paperwork exists.

The draft also provides for annual renewal and updating information when it changes.

This isn’t just another account you create and forget about.

The bit nobody’s connecting

Put those developments alongside each other.

Letting-agent records show rental income. Deposit records provide another source of tenancy information. The landlord database links people, properties and rent details.

HMRC explicitly says it is working with the housing department to consider reporting requirements together with the new register.

My reading: the rental market is becoming easier to cross-check.

That does not mean one giant system is already live, automatically matching every payment. The reporting details are still being designed.

But the direction matters.

If different records tell different stories about the same property, those differences could become easier to spot.

And a mismatch doesn’t automatically mean wrongdoing. Missing payments, ownership changes or simple mistakes can create discrepancies too.

So what do you do with this?

Nothing dramatic. Start with boring.

Keep a rent ledger: a simple record of what was due, what arrived and when.

Check it against your agent’s statements and bank account.

Keep expense invoices, mortgage-interest statements and safety certificates organised by property.

If you’re buying your first rental, build that habit from day one. Future you has enough problems without decoding “Final_Final_PropertyCosts.xlsx”.

You don’t necessarily need expensive software. You need records you can explain.

And remember: rent charged, rent collected and taxable profit aren’t interchangeable numbers.

The bottom line

The tax rise changes what you might keep.

The reporting reforms could change how easily the numbers are checked.

For investors, that makes tidy records part of running the investment, not an annual January rescue mission.

Your spreadsheet should tell the same story as your bank account.

Speak next Thursday.