Council wants to charge student landlords business rates

Student landlords in one university town can be forgiven for wondering whether they are investors or run a business. Councillors in Warwick want to charge student landlords and other landlords letting out shared houses extra for collecting rubbish. They have voted to charge houses in multiple occupation business rates and to charge landlords the same costs as businesses pay for services. Students in Warwick are concerned the move will simply mean higher rents as landlords shift the financial burden on to tenants. “This is rather unfair and unkind,” said Warwick Students Union welfare and campaigns officer Ben Sundell. “Given the average age for a first-time home buyer is now in the late 30s, many young working people now live in shared houses and pay rent to a private landlord. “Would the council consider charging these landlords in the same way? Of course not – there would be an outcry.” Warwick Council declined to comment, but a spokesman indicated officers are still considering the legal issues involved with the decision. For instance, HM Revenue & Customs refuses to treat property letting as a business and defines the activity as an investment. Successive tax tribunals and courts have agreed with this definition for decades. However, landlords with holiday letting property pay business rates although councils do not charge for rubbish collections. The other problem for councils is are all HMOs charged as businesses or just student properties? If not, the council will have to work out a system for handling HMOs where fewer than the licensed number of tenants are students. “It is difficult to see how such a scheme could be instituted in such a way that it would not be challenged by landlords or students,” said a Warwick University spokesman. “It would be hard to legislate in such a way that could easily identify what constituted a student residence as opposed to any other house of multiple occupancy.”

Landlord blog

Sam Dickinson

Further reading

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Students face higher rents and longer commutes - survey

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