A Conservative minister has said that the government have ‘no plans’ to introduce business rates for student landlords, in a House of Commons question session held yesterday.
CLG Minister Marcus Jones MP was responding to Bristol Labour MP Thangham Debbonaire, who asked ministers if the DCLG would look at bringing student accommodations within the scope of business rates.
Debbonaire told the House that business rates should be introduced because local services in her constituency of Bristol are being put under increased pressure due to the rise in student numbers, while student accommodation providers contribute “almost nothing to the costs”.
However Minister Marcus Jones MP was quick to quash the demand, saying: “We have no plans to change business rates to bring within that scope student accommodation as [Ms Debbonaire] advises”.
The RLA opposes student landlords being subject to business rates, with the main concern being that this could mean landlords will look to coup the extra tax by increasing rents. Also, student landlords will have less money to spend on things like repairs and home improvements for their tenants, meaning that the overall condition of living for the student could deteriorate.
RLA Policy Director David Smith said: “There are sound reasons why students are exempted from council tax. To charge similar rates to landlords letting to students will drive up their rent by the same amount and is little more than a stealth tax.”
Students in the UK can apply for a council tax exemption, with this loss of funding is currently being made up by a government revenue support grant.
However, this grant is due be axed in the next few years, which is why an increasing number of Labour councils are calling for business rates to be introduced on student accommodation providers.