Student landlords could be forced to pay business tax under controversial new plans.
Students are currently exempt from paying council tax and student accommodation is currently exempt from business rates – a situation that could now change if councillors in Liverpool get their way.
Liverpool City Council believes that as student landlords are a ‘profit –making businesses’, they should pay for the public services used by their tenants.
It now wants to find a way to force them to pay business rates, with local authority members unanimously backing the plan at a meeting last week.
The motion was put forward by councillors Nick Small and Laura Robertson-Collins. Councillor Small said a Government grant currently provided to compensate for the loss of council tax income from students is being phased out, making it necessary to raise cash another way.
The Residential Landlords Association however has serious concerns over the plans, fearing they could force students’ rents up and reduce the quality of the accommodation on offer in the city.
Andrew Goodacre, RLA chief executive said: “This sets a very dangerous precedent. Where one council goes others are sure to follow.
“Landlords will look to recoup this extra tax by increasing their rents and taxing them in this way will reduce the amount of money they have to spend on repairs and home improvements for their tenants.
“This is yet another example of landlords being treated as little more than cash cows by those in power. I hope the Government will share our concerns and put a stop to this unfair tax on students who are already paying through the nose for their education.”
Liverpool Guild of Students has also opposed the plans – and criticised the council for tabling the motion while students were still away on their summer break.
A spokesperson told the Liverpool Echo: “The motion has been tabled at a time when there are no students in the city to dispute the proposals, suggesting there is an attempt to do this behind closed doors.
“While the motion implies the extra charges will be picked up by landlords, we believe they will ultimately be passed onto the students in the form of a rent increase – and at a time when maintenance grants have been cut and fees and the cost of living is going up. It is the poorest students who will suffer as a result.
“This may also lead to landlords reducing their repairs budget to make up the shortfall, which could then lead to poorer student accommodation.”
The council now plans to establish a working group with university, student and landlord representatives to look at the plans. It said it will try to find ways to ensure the increased costs are not passed on to students, with Mayor Joe Anderson to write to Government ministers for permission to introduce the changes.