Student landlords in Liverpool could soon be forced to pay business tax, under controversial new rules outlined by the City Council.
At present, student accommodation is currently exempt from business rates, with students not permitted to pay council tax.
However, Liverpool City Council feels that as student landlords are essentially ‘profit making businesses,’ they should be charged for the public services used by their tenants.
This motion was originally proposed by councilors Nick Small and Laura Robertson-Collins, with other local authority member unanimously backing the plan this week.
A Government grant that compensates the loss of council tax income from students is to be phased out, leaving the Council left to think of other ways to raise cash.
Responding to the calls, the Residential Landlords Association has expressed its concerns over the plans. The firm fears that student landlords could be left with little alternative but to pass these higher costs onto their tenants, should they have to pay business rates.
Andrew Goodacre, Chief Executive of the Residential Landlords Association observed: ‘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,’ he continued.
Further opposition has come from the Liverpool Guild of Students, who have criticised the council for forwarding the proposals why students were still 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 is now to establish a working group with university, student and landlord representatives in order to look at the plans.