UK landlords: bind the SPI net property amounts, leave property_wealth to the engine, add receipts and finance costs

[juaristi22]

Closes #1106. #1121 has merged, so this branch is rebased onto main (75167a688); the rebase brought in only a changelog sentence, #1121's receipts note and an equivalent rewrite of one weighted share in frs_uc_start_up_period. Draft: the modelling decisions below are held.

What changes

A. The SPI net property-income amounts bind unscaled (4d2dbc894). SPI Table 3.7 "net income from property" is landlords' profit after allowable expenses and before residential finance costs, the concept property_income holds (PolicyEngine/policyengine-uk#2172 documents it). The incumbent's x1.9 scaling set the Property Rental Income Statistics (PRIS) receipts, which are before expenses, against it. The signed exclusion is retired and the 13 rows bind at £31.78bn for 2025 (the incumbent fixture holds £55.78bn).

B. property_wealth stays with the engine (2364aad35). The WAS stage saved the survey's own total, which overrides policyengine-uk's sum of the three property components and is never uprated (the uk-data#543 defect). The release export drops it, and so does the measure resolver's scratch H5, inside #1115's _engine_scratch_frame. It is a reviewed export exclusion and an engine-derived coverage exclusion; the three components stay required. On the A9 candidate at 2025 this moves property_wealth from £7,469.5bn to £7,633.4bn and household land value from £4,595.0bn to £4,697.3bn (target £4,559.8bn).

C0. policyengine-uk 2.123.0 (db5c94fea), the release with PolicyEngine/policyengine-uk#2172's landlord inputs. Only policyengine-uk moves in the lock; policyengine-core stays 3.32.19 on the UK side and 3.32.5 on the US side.

C1. Finance costs on the SPI channel (47db70fc2). The tape's LLIR_RESTRICT_AMT_TOT (restricted land property finance cost) becomes property_finance_costs, drawn last in the first-stage SPI model so every earlier draw is unchanged, and uprated by obr.mortgage_interest. The donor is refused unless TAX_CRED carries the 20% relief (median ratio between 0.195 and 0.205).

C3. A property_components stage (9859249d5, walk rule a74802bbc) after regional_property_uprating.

• FRS landlords report ROYYR1 after show card K6, which nets mortgage interest and capital. Their finance costs are drawn from the tape among its landlords with a profit after finance costs: person-keyed incidence by decile, then the amount from a regime-gated QRF on profit and age. The draws are added back to property_income (see the question for Max below).
• Every landlord gets property_rental_income (receipts) from PRIS 2024-25 Table 13. Landlords are ranked by profit and walked into its eleven bands with the CGT Table 3 walk's rule, each band filled to its PRIS share of the spine's own landlords. Receipts are linear within a band and never below profit; the open top band is solved to the individuals' receipts total.
• A release-blocking stage gate, uk_stage_property_components. The vendored PRIS resource has 44 rows (Tables 1, 2, 6, 8 and 13).

PRIS stays a diagnostic. 69ed06aff bound three PRIS targets (individuals' receipts, the eleven landlord counts by size of receipts, residential finance costs); 7cfab0932 reverts it, so active national references stay at 1,244. Every PRIS count or receipts target measured pushed the SPI property amounts out of their bound (below). The stage receipt reports the spine against PRIS instead.

Measurement

Licensed arms with a national calibration and local staging only, on the commits before the rebase. The scripts are in data/ukds/acceptance/1106-property-income/ and the receipts in experiments/1106-uk-property-income-receipts.md. The Chronicle feed is the 825406f artifact, rebuilt on 2026-10-08 with both digests matching the pin.

• Control (UK: port the remaining uk-data fixes tracked in #1095, engine items included #1121's head, policyengine-uk 2.122.2): loss 0.00712, 98.3% of 1,167 targets within 10%, 7 of 7 calibrated-seam gates pass.
• C3 (A, B, C0, C1 and the stage; no PRIS targets): loss 0.00714, 98.1% of 1,180 within 10%. The 13 SPI property amounts fit to 0.1% (48% off at design weights).
  • uk_target_fit fails only because UK: port the remaining uk-data fixes tracked in #1095, engine items included #1121's West Midlands deferral is stale: that cell sits at +23.1%, inside the 25% bound. With the deferral dropped (c3x), 7 of 7 gates pass.
  • On the licensed spine, finance costs total £10.15bn against PRIS's £11.08bn, and all 33 spine gates pass.
• Engine quantities at 2025 (policyengine-uk 2.123.0, control against c3x):
  • The finance-cost relief is £1.90bn for 1.03m landlords, with £2.21bn of costs carried forward for 0.31m.
  • property_finance_costs total £11.71bn (PRIS: £12.13bn).
  • The property allowance deduction falls from £0.117bn to £0.062bn.
  • Housing Benefit −£21m, Council Tax Reduction −£26m, Pension Credit +£10m, Universal Credit +£3m.
  • income_tax takes 0.33 s against 0.23 s to compute.
• The share-filled walk on the spine: every band, the lowest included, holds its share within rounding. At the C3 calibrated weights it gives £46.11bn of receipts against PRIS's £49.81bn (2024 values), and 1.19m, 0.90m and 0.35m landlords in the lowest three bands against 1.29m, 0.85m and 0.33m.
• PRIS as targets, four arms. Each fits the PRIS rows it binds to within 3.3%, but each breaks the SPI fit:
  • All 13 rows with the count-filled walk: £20,000 to £30,000 of total income −17.8%.
  • The same without PRIS's lowest band: still −17.7%.
  • All 13 with the share-filled walk: £70,000 to £100,000 +48.2%.
  • The two totals alone: still +30.9%.
  • uk_weight_ratio fails in all four.
• The final head (7b20ef73c, arm c6x): loss 0.00710, 98.1% of 1,180 within 10%, the SPI property amounts and counts within 0.2%. All 7 calibrated-seam gates and all 33 spine gates pass once the stale West Midlands deferral is dropped; the cell sits at +23.4%.
  • Against PRIS at the calibrated weights: receipts £45.72bn against £49.81bn (−8.2%), finance costs £10.59bn against £11.08bn (−4.4%), and 2.77m landlords against 2.85m. The bands from £40,000 run short, the open band by 39%.
  • At 2025: relief £1.89bn for 1.01m landlords; the property allowance deduction £0.142bn for 0.33m landlords (the control: £0.117bn for 0.22m).

Decisions held

• The open top band's multiplier pins at 1, so landlords with £100,000 or more of receipts carry no deductible expenses. The bounded bands take their midpoints, and PRIS covers UK property only, while the SPI profit and the engine's receipts include overseas property.
• Removing UK: port the remaining uk-data fixes tracked in #1095, engine items included #1121's West Midlands deferral. It is stale on this head (the cell sits at +23.4%, inside the 25% bound), so uk_target_fit fails on it until it goes.
• For Max, the FRS add-back (decision 6). C3 adds FRS landlords' imputed finance costs back to property_income, so the engine relieves the interest once, as the s. 274A reduction; the capital part stays netted. This departs from the uk-data#509 rule of using FRS amounts as reported. The alternative is to leave FRS profit as reported and give FRS landlords no finance costs. We will change it before merge if Max disagrees.
• Signatures (María): the input-mass parity entry for property_wealth, retiring the two stale property count exclusions, and the net-new landlord columns' signed difference.

Known residuals

• PRIS counts UK property only.
• Landlords without profit carry no receipts. PRIS counts them; in the FRS 2024-25, 67 adults (0.11m weighted) report a loss from other property.
• Sub-letting rent keeps equal receipts until Rent a Room is released (Model rent from boarders, lodgers and sub-tenants for the householder policyengine-uk#2002).
• FRS mortgage capital stays netted.
• property_finance_costs_brought_forward is unset.

Testing

• The engine-free and engine-UK lanes, the coverage manifest --check, and the vendoring and pin checks: run on C3.
• After the revert: the target, calibration, country-spec and stage tests (293 pass).
• After the rebase: H2 spine parity, the stage and FRS spine tests (120 pass), tools/ci_test_plan.py verify, and ruff on every changed file.
• The base is now main, so CI runs from this push on.

🤖 Generated with Claude Code

[juaristi22]

@MaxGhenis, we need two rulings on the FRS property rule from #1081 and uk-data#509 before this merges.

1. Adding imputed finance costs back to FRS landlords' profit. ROYYR1 is the rent after the items on show card K6, which include mortgage payments and loan interest. So FRS landlords' profit sits below the SPI concept that property_income now holds: profit before residential finance costs (PolicyEngine/policyengine-uk#2172). The property_components stage draws each FRS landlord's finance costs from the SPI 2022-23 tape and adds them back to property_income. The draw has two steps: whether a landlord has costs follows the tape's share in their decile of profit after finance costs, and the amount comes from a QRF on that profit and age. The capital part of the mortgage payments stays netted.

• Size. On the licensed spine at design weights (2024 values), 32% of the 1.03m FRS landlords draw costs, £2.37bn in all. That raises the FRS channel's profit from £9.5bn to £11.9bn.
• Income tax. As reported, the interest is in effect relieved at the landlord's marginal rate. With the add-back, income tax charges it and gives the 20% reduction of ITTOIA 2005 s. 274A instead.
• Means tests. Housing Benefit, Income Support, tax credits, Council Tax Reduction and Pension Credit read property_income_after_finance_costs, so they still see the reported amount.
• HBAI. HBAI net income reads property_income, so it rises by the interest, less the extra tax.
• Fit. With the add-back, the 13 SPI property amounts calibrate to within 0.2%, and every gate passes once a stale deferral inherited from UK: port the remaining uk-data fixes tracked in #1095, engine items included #1121 is removed (experiments/1106-uk-property-income-receipts.md, section C8).
• The alternative is to leave FRS profit as reported and give FRS landlords no finance costs. All finance costs would then come from the SPI channel: £7.78bn of the £10.15bn now drawn at design weights, against PRIS's £11.08bn for individuals. The SPI amounts bound on property_income would then lean on reweighting, as frs_property_income's docstring notes.

2. If the add-back stands, what about landlords who report a loss? Because K6 nets mortgage capital and interest, an FRS loss is often not a tax loss. Take £12,000 of rent, £2,000 of repairs and £11,000 of mortgage payments, £9,000 of them interest. That is reported as a £1,000 loss, but for tax the profit is £10,000, with £9,000 of finance costs. The stage draws finance costs only for FRS landlords reporting a profit, so landlords with a mortgage who report a loss stay at zero. The consistent extension would draw their interest the same way, add it to the reported loss, and keep the result if it is positive. That turns some reported losses into profits, against "a loss counts as zero". It affects at most 67 adults in the FRS 2024-25 (0.11m weighted). Should we extend the add-back to them, or keep their losses at zero?

If you disagree with either, we'll change the stage before merge and re-measure.