Coventry landlords fear council tax on empty student properties could put them out of business

Student landlords in Coventry could be put out of business if they have to pay new council tax bills on properties left empty during the pandemic, the Coventry Telegraph has reported.

Students and their landlords are exempt from paying council tax when the building is occupied solely by students, which is known as a Class N exemption.

Under government legislation, empty buildings can be charged council tax, and many buildings have been left unoccupied due to the impact of Covid-19.

Landlords say that they have been given weeks to pay their new tax bills, and have asked the government for help to avoid “crippling” damage.

Tony DeMarco, owner of Uni City Lodge, said that around 30 of his 46 rooms are currently empty, leading to a council tax bill of £93,000.

He said: “When you are suffering financially anyway, it is the last thing you want. I can honestly say it’s the worst period of my business career, but I’m not the only one. Everyone is suffering. We are just in an industry that hasn’t been looked out for.

“We’ve still had to keep the staff – we can’t just kick them out. We have to heat and light the building, and pay for security and all the overheads which don’t go away. If they insisted on paying the £93,000 now, we would basically have to wind the business up.

“Whether there’s any chance of the government changing the laws, we don’t know. It’s a very unfair situation that we have been placed in, nothing to do with ourselves, we have just been caught out by the pandemic and there is no help for us.”

It feels like we are being penalised for having no business.

–Jeffy Li

Jeffy Li, of Apps Living, said that around 75% of the 200 rooms in three of his buildings are empty.

He said: “It feels like we are being penalised for having no business.

“Throughout the pandemic, the government have helped the restaurant business, the entertainment business, and the high street and retail – but not the student accommodation sector at all.

“They’ve forgotten about us. You try and make ends meet, and then they whack this council tax bill on top which makes it even worse.

“Our bill is well over the £100,000 mark, £140,000 I would say. It would put us in insolvency if they take that. A lot of similar businesses will be in the same situation.”

Planning permission for purpose-built student accommodation only permits landlords to rent to students, and many applications have been made to temporarily change the use to part-residential to help plug the gap.

Councillor Richard Brown, cabinet member for strategic finance and resources, said: “We understand that these are very difficult times for many and I was pleased to be able to meet a number of landlords last week to discuss the issues they face.

“However, the decisions on who has to pay council tax and when is one that lies with government, not local councils.

“Landlords are running a business and as such they may be eligible for government support so I would urge them all to look into that so they don’t miss out on anything.”

A government spokesman said: “All domestic property, whether occupied or not, is generally liable for council tax.

“Councils have the discretion to offer a council tax discount on empty properties. However, the Government does not plan to introduce a new exemption for landlords whose properties are empty, whether for students or other households who are renting.”