Students are currently exempt from paying council tax and student accommodation is currently exempt from business rates, but that could soon change if councillors in Liverpool get their way.
Liverpool City Council reportedly wants to see student landlords operating a ‘profit-making businesses’ in terms of buy-to-let start to pay for the public services used by their tenants – in other words, it wants student landlords in the city to start paying business rates.
Local authority members at a meeting this week unanimously backed the plan, which was originally put forward by councillors Nick Small and Laura Robertson-Collins.
The problem for student landlords is that a government grant which provides to compensate the loss of council tax income from students is now being phased out, which means that Liverpool City Council is now looking to raise funds from elsewhere, with landlords often viewed as an easy target.
But the Residential Landlords Association (RLA) has expressed grave concerns over the plans, fearing that student landlords may have no alternative but to pass higher costs on to student tenants if they suddenly have to pay business rates.
Andrew Goodacre, RLA chief executive, commented: “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 putting forward 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, but this will provide little comfort for student landlords or tenants in the city and beyond.