Prominent market commentator and buying agent Henry Pryor has been involved in a Twitter spat over whether the changes to mortgage interest tax relief will actually impact on a significant number of buy to let investors, and whether it constitutes a ‘Tenant Tax’.
Campaigners against the changes to mortgage interest tax relief, which comes into effect this week and involves a phased reduction of the relief each year until 2020, have dubbed the change a Tenant Tax in a bid to gather wide support.
Pryor argued on Twitter that the mortgage interest changes would firstly effect only a minority of landlords and secondly was specifically targeting them - not tenants. Therefore he suggested tagging the measure as a ‘Tenant Tax’ was inaccurate and disingenuous.
“Lots of respectable people are going to tell you there’s a Tenant Tax coming in on Thursday. There isn’t” Pryor tweeted. He went on to tweet that publicity surrounding a ‘Tenant Tax Awareness Week’ currently going on was “complete nonsense” which “may unsettle a lot of tenants quite unnecessarily.”
Pryor told his near-23,000 Twitter followers that he was deleting his account with online forum Property Tribes because of his opposition to the approach taken by the forum’s founder, Vanessa Warwick.
He went on to tweet that a claim by the Residential Landlords’ Association claiming that up to “a million families face rent increases” because of the tax change was “complete pants” and was nothing more than “scaremongering - at best.”
After the exchange, Henry Pryor told Letting Agent Today he had a lot of sympathy for the landlords impacted by the changes that have and remain to be introduced, and he accepts that many will find their sums don't add up and some will have to refinance or sell up.
“However, I have an issue with the some of the claims being made” he insists.
“Stamp duty may have increased for those buying a property to let out but this is a cost that could be given to the seller (as is happening at the top of the market) and is a cost that can be off-set against any future capital gains tax or indeed (for the moment) carried forward against any loss” he says.
He goes on to call the description of the mortgage interest tax relief change as the ‘tenant tax’ a “public relations stunt” that may unnecessarily worry some renters.
“The changes being made to the landlords’ ability to off-set finance interest charges against income may be unfair, may be politically motivated and may be worthy of challenge but it does only impact seriously on landlords with mortgages.
“I believe that only one in three landlords has a mortgage and only a proportion of these are highly geared. The majority of landlords will not be able to argue for a rent rise or seek to terminate a tenancy and blame the tax changes. At least they won't be able to get away with doing so” Pryor concludes.