In a move that could raise £2 billion for the Treasury, the government is reportedly considering a new tax: applying National Insurance contributions to landlords’ rental income. The proposal, which is said to be under consideration for the upcoming Autumn Budget, would see rental income taxed in a way similar to earned income from employment or self-employment.

According to HMO expert Vann Vogstad, this measure would hit the Houses in Multiple Occupation (HMO) sector “first and worst.” This is because HMOs typically generate higher rental income per property than standard buy-to-let properties, meaning these landlords would shoulder a disproportionately large share of the proposed levy.

Vogstad warns that this new tax could be “the final straw” for many landlords already facing increased regulation and tax changes, potentially causing them to exit the sector. The inevitable result, he argues, would be a reduced supply of rental properties and a corresponding rise in rents, with tenants ultimately “bearing the brunt” of the policy.

The proposed tax is part of a broader push to raise revenue for the government. While it’s seen by some as a way to make the tax system fairer, critics argue that it could destabilize the rental market and exacerbate the housing crisis.