Chancellor Rachel Reeves will scrutinise ‘every single pound the government spends’ as part of the Spending Review on 11 June.
The Spending Review will set the scene for the Autumn Budget later this year, with rumours the Treasury is considering increasing taxes on landlords to raise extra revenue.
Reports suggest that capital gains tax could be a target, while there could also be plans to introduce National Insurance requirements for landlords.
So, how will the Spending Review work and what could it mean for the rental market?
What is the Spending Review?
The Spending Review sets departmental budgets for the next three years as well as an investment budget for the next four years.
It’s used to set spending amounts for core public services like healthcare and transport, plus investment in research and infrastructure to contribute to economic growth.
All government departments are asked to submit their budget requests to the Treasury.
These requests are reviewed, with a final budget agreed which details how much each department will spend and when.
The Spending Review on 11 June is the second phase of a process that started after the Autumn Budget last October.
What could be in the Spending Review?
The Spending Review is expected to focus on budgets for the NHS and defence.
The NHS is estimated to account for 39 per cent of day-to-day spending, while the government has already pledged to increase military spending by 2.5 per cent of national income by 2027.
As spending in some areas increases, the government will have to reduce budgets in other areas. As a result, independent think tank The Institute for Fiscal Studies (IFS) says ‘tough choices are unavoidable’ for Rachel Reeves and her team.
When is the Autumn Budget 2025?
The Chancellor is yet to set a date for the 2025 Autumn Budget. However, it’s likely to take place in late October or early November.
The Autumn Budget 2024 was on 30 October, and the Spring Statement 2025 was on 26 March.
As part of its manifesto, the Labour government has committed to delivering just one major fiscal event (budget) a year.
Chancellor considering landlord tax hikes
Reports suggest that alongside the Spending Review and ahead of the Autumn Budget, the government is looking at ways to increase tax revenue.
One option it’s rumoured to be exploring is increasing taxes on landlords, bringing their tax liability in line with working people.
Some of the tax rises reportedly being considered include:
- introducing a separate tax band for rental income
- requiring landlords to pay National Insurance on rental income
- levying VAT on rental income
- increasing the capital gains tax rate (CGT) for selling rental properties
It’s important to note these are currently just rumours and the government hasn’t suggested it will be increasing taxes on landlords.
Capital gains tax rise biggest concern for landlords
New research shows that a higher CGT rate for selling properties is a major concern for landlords.
The vast majority of landlords (83 per cent) said a CGT rise is their main worry, with 61 per cent saying they’re ‘very concerned’, according to a survey by the National Residential Landlords Association.
Other key concerns included the impact of the Renters’ Rights Bill and proposed changes to minimum energy efficiency rules.
Useful guides for landlords
- 5 buy-to-let tax changes for landlords in 2025
- Revealed: UK property hotspots with fastest-rising rents
- British Gas issue smart meter warning: 300,000 properties at risk
- House prices – what are the latest predictions for landlords?
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