Finance and Taxation Reform North West

Council plans new tax for student landlords

Sally Walmsley
Written by Sally Walmsley

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.

Read the council motion here

About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Magazine and Digital Editor for the NRLA. With 20 years’ experience writing for regional and national newspapers and magazines she is responsible for editing our members' magazine 'Property', producing our articles for our news site, the weekly and monthly bulletins and editorial content for our media partners.


  • The mind boggles at the mentality of politicians – I can only assume none of the ones spouting this nonsense have ever been in business. To suggest that you can increase the input costs of a business and not have any of that cost passed onto the customers of that business is just fairyland thinking.

  • We have been told that property business is only a passive income investment giving rise to taxation of income instead of profit by 2020. Liverpool council now reverses the logic saying that renting to students is a business and we should pay business rates. Everybody seems to view landlord as a cash cow for diminished public purse.

  • What a ridiculous idea. So they intend to treat letting to students as entirely different from letting to families or groups of young professionals? What about if you have a mix? I had a student who planned to stay on to do an MSc, but took a job offer instead. So he paid council tax, at the discounted single occupancy rate, as the 3 students he shared with were said to be “invisible” as far as council tax was concerned. So, in this proposed scenario, what would happen in that case? Would he be exempt from council tax? Would business rates suddenly not apply? I understand the council’s desperation, but it’s the phasing out of the Revenue Support Grant that’s the issue – how can the government possibly justify that?

  • As a Landlord who rents studios to young working people, it has always seemed odd to me that a 19 year in education doesn’t pay rates, compared with 19 year old who’s working. Now you may say that is because the working 19 year old has an income. The bottom line in this is, the fact that in university cities developers are building massive band new accommodation blocks for students, therefore the “Money” is chasing the profit in renting out these developments. They are not building blocks of Studio apartments for young people who are in fulltime employment. Why? Because a working 19 year old has a limited income. After paying utilities and council tax, it doesn’t leave huge amount for rent.
    We are experienced Landlords. We know the numbers. We know why an investment company is building another 400 bed student block. Clear profit over another investment opportunities. Rest Homes use to be except from Rates. Historically, when the Government has been encouraging the development of a sector in the past and fattened it up to its peak, they then start regulating and taxing it hard.
    The pendulum swings both ways. Same game for the Government, different sector.
    They will be encouraging corner shops next!

  • Has Liverpool Council considered that when these properties are subject to business rates the utility
    companies will charge commercial rates for gas, electricity and water including full vat and climate
    change levy?

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