Extending business rates to student accommodation ‘fraught with unfairness’
The proposed Non-Domestic Rates Bill risks significant damage to investment in Scotland’s student accommodation sector, the Scottish Property Federation (SPF) has warned.
Student accommodation, like any domestic premises, is exempt from business rates. However, the SPF said this principle is currently at risk in Scotland due to an amendment to the Non-Domestic Rates (Scotland) Bill.
The amendment, introduced at Stage 2 of the parliamentary scrutiny process without consultation, would bring student accommodation into the scope of business rates.
Ahead of the Bill’s Stage 3 debate, the SPF has been working across political parties to urge Holyrood to consider the damage this amendment could cause to investment into the student accommodation sector.
David Melhuish, Scottish Property Federation director, said: “Extending business rates to what is essentially domestic property is fraught with unfairness and a fundamental departure from the principles of a tax that is aimed at non-domestic properties. Business rates are not designed for properties in which people live for any significant period of time.
“Inflicting an additional charge on student accommodation providers, who already pay business rates on their commercial spaces, will have a significant impact on the high-quality accommodation that this sector provides.
“Over the past decade, student accommodation providers have built tens of thousands of homes for students, meaning that the houses students otherwise would have been living in are available to families or young professionals.
“Business rates would strike a significant blow to this sector, deterring further investment at a time when the government is seeking to support all housing tenures to alleviate growing housing pressure in Scottish university cities and towns.
“This new legislation will ultimately harm Scotland’s world-class higher education system and the students who call this accommodation their home.”