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Closing landlords’ council tax loophole

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Labour-run Islington Council has become one of the first local authorities in the country to close a council tax loophole that landlords have been exploiting for years.

In the past, blocks of student flats in Islington were given a block council tax exemption throughout the year, as students do not pay council tax. There are more than 4,000 such student flats in accommodation blocks across the borough.

Increasingly, over the summer when students are away, landlords are letting these flats to tourists and other visitors in order to maximise their income. The flats are therefore liable for council tax during this period, outside of university term-time. If 1,000 such flats are rented out for 10 weeks over the summer break, the council tax due is £121,250. This is money that could be going towards local services upon which residents rely.

Islington Council has taken action to close this loophole by now requiring landlords to supply the tenancy and student occupancy details for every flat for every week of the year. The landlords will be liable for council tax for any periods during the year when the flats are occupied by people other than students.

Cllr Andy Hull, Islington Council’s Executive Member for Finance, Performance and Community Safety, says: “It is unfair that landlords have effectively been getting a tax break on renting their student flats out over the summer, particularly at a time when Islington is experiencing massive and ongoing budget cuts from central Government.

“Islington Labour is on the side of the many who pay in full the tax they owe, not the few who would seek to maximise their income by exploiting a council tax loophole. This move is fairer for all our residents and helps to pay for essential local services. I am pleased that this Labour-run council has become one of the first in the country to close this council tax loophole.”

 

Pictured - Cllr Andy Hull, Executive Member for Finance, Performance and Community Safety

 

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