Shadow Chancellor Rachel Reeves says Labour would increase tax on buy to let properties and on investment income for landlords.
Reeves was addressing the issue of paying for long term social care, which she accused the Conservatives of planning to fund through a ‘triple whammy’ of increased National Insurance, income tax and higher council tax.
“We’ve said that it’s not right that the only people who are being asked to contribute to the health and social care levy are those people who go out and work every day and the people who employ them” Reeves told the BBC over the weekend.
“If you get your income from stocks and shares and dividends or a portfolio of buy to let properties, then you pay no additional tax whatsoever in this health and social care levy” she told listeners to Radio 4.
Critics have pointed out that buy to let landlords are typically professionals who already work and pay tax through other means, including Capital Gains Tax on their investment properties when they sell.
The critics also says that 12 per cent of buy to let landlords are blue collar workers and seven per cent are retirees, according to recent research by the London School of Economics. Young couples make up 35 per cent of buy to let landlords in the UK.
The threat to buy to let was one of five points set out by Reeves to combat the developing cost of living crisis. Labour’s other proposals would include cutting VAT on energy bills and expanding the Warm Homes Discount.
Challenged on whether Labour’s alternative plans would raise the £12 billion required, Reeves said: “Well, there’s lots of papers out there from different organisations that show you could do exactly that.
“We will set out our plans ahead of a General Election, but it’s not right just to ask those people who go out to work for a living to pay higher taxes, especially at a time when the prices of everything are going up.”