Student Housing Loophole Costing NI Public Services

A 'loophole' in student accommodation rates is leading to losses of more than £4m a year in revenue for public services in Northern Ireland.

Rates exemptions for private and university-run halls were expected to be scrapped by the Department of Finance in 2018 however several factors, including the pandemic, meant this never came to fruition.

The number of purpose-built student accommodation (PBSA) beds in Belfast has been rapidly expanding in recent years. Similarly to university-owned halls of residence, none of the facilities are currently required pay rates.

For some of the larger assets in the city, for example, those that house upwards of 750 students, the annual rates bill would be in the region of £250K.

Belfast City Council is expected to approve an 8% increase in the district rate this week, which has raised concerns amongst some councillors.

SDLP councillor Carl Whyte commented Belfast City Council and the Department of Finance needed to "work with the utmost urgency to close this loophole".

He continued stating that in the midst of a cost-of-living crisis, a "single person living in a one-bedroom flat pays more rates than companies making millions of pounds,"

"Belfast City Council's proposed 8 per cent rates increase means families, elderly people and those living alone could pay even higher rates during the worst cost-of-living crisis in living memory.

"Yet the estimated rates shortfall because of the exemption of rate paying for purpose-built student accommodation is roughly £4m per year - that £4m could be used to reduce the proposed 8 per cent rates hike but instead is sitting in the bank accounts of multi-million-pound businesses and organisations."

A statement from the Department of Finance said the proposal to end rates exemption for university-managed halls was included in its 2016 Rates Rethink review.

"The Rates Rethink proposal was to remove the halls of residence exemption from April 2018 to ensure consistent treatment across the student housing sector."

"However, with the collapse of the executive in 2017, the Covid pandemic requiring other rating policies to be prioritised in 2020 and 2021, and the absence of a functioning assembly since March 2022, it has not been possible to take this further forward."

Belfast City Council also added: "The council is aware of this exemption and has highlighted this on previous occasions to the Department of Finance as part of its responses to rates consultations."