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More on Council Tax and Student Exemptions

More on Council Tax and Student Exemptions

At our February members meeting, Martin Silman re-iterated the advice given in the December newsletter that we:

- Accept that, although the council has already been recompensed by central government for the loss of council tax in student houses via the Formula Grant, we will increasingly be asked to pay council tax for short voids and periods when students cease to be students (for example after graduation)
- He recommended that we contract for 11 months (or 12) so that non-final year students can be shown to be in residence (and thus council tax exempt) for that period
- We also need to accept that in these times of constrained revenues, the council will no longer honour the '1 month exemption" previously allowed between tenancies and will now charge for the empty/void period regardless of whether the house is being refurbished or not
- We should also consider a move to joint tenancy agreements (as in that case PCC accept that any liability is the tenants not the landlords) or, if we continue to follow the Uni preference and offer individual contracts, we make clear in those contracts that any CT liability during the period of the contract is the tenants responsibility. This latter situation does not automatically solve your problem, but does give you legitimate grounds for debate
- We should also consider asking new student tenants to sign 3rd party consent forms allowing us to discuss their situation with the University and the Council should issues arise.


Samantha Hill, the Information Disclosure and Complaints Manager at the University of Portsmouth, when asked about the use of 3rd party consent forms (in relation to Right to Rent rather than Council Tax) responded:

"I refer to your email ... asking whether the University would be able to confirm that an international student has the appropriate paperwork to allow your members to rent a property to them

As I understand the forthcoming legislation, anyone wanting to rent a property will need to be able to prove their identity and, where appropriate, their immigration status. The individual wishing to rent the property should have that information to hand, but I am aware that if an individual does not have the appropriate paperwork, landlords will be able to check the individual's status by contacting the "Landlords Checking Service" either via the internet or by telephone. I accept that it may take up to 48 hours to receive a reply from this checking service, but the information from the check will be the most appropriate data to have, as it refers to the individual's immigration status as required by the new legislation.

In a situation where a student approaches a landlord before they enrol for the year with the University, which will be the situation in the majority of cases, the University will not know at that time whether a student has been issued with a visa as this is only checked on enrolment. Therefore, the University could respond to a request from a landlord if accompanied by the written and signed consent of the individual concerned, but in most cases could only confirm whether or not the University had issued a Certificate of Acceptance for Study (CAS). This is not the same as whether the individual has the right to stay in the country and therefore should not really be relied upon to provide confirmation of having the correct paperwork. This is why it is suggested that landlords should use the checking service in most cases.

The University will be providing information for all students, before they come to University and when they first arrive, about the new legislative requirements and reminding students of the type of information they need to have before trying to rent a property, so hopefully there should not be too many problems of this sort. However, if the individual does not have the required paperwork, and for some reason the landlords check service is not helpful, the University could confirm that it had issued a CAS statement, if the student provides their consent for this."

And when asked about policy relating to council tax liable after a student course ends, Mr Atkinson, a local taxation officer at Portsmouth City Council replied:

"Universities determine, when a course finishes and by law, we must adhere to the date they provide. It is usually 31st May each year. Those with a joint tenancy would become liable from 1st June until the end of their tenancy. Those on individual tenancies, would not pay. That would be the responsibility of the property owner. "

Therefore, if a tenant is on a joint contract, "liability cannot be passed to an owner, if a tenant doesn't pay their bill. Foreign students would be required to provide student certificates of exemption in the English language. The criteria if they are over 20 is that they must be undertaking a course that lasts for an Academic year, takes at least 24 weeks a year and involves at least 21 hours of study per week during term time. "

Thus the good news is that the practice of chasing a landlord for council tax owed by a tenant who cannot be found has now officially stopped. The bad news is that students particularly, will be paying more rent to reflect the increased charges faced by landlords due to the increased taxation of student properties by Portsmouth City Council.

(And for those who like the detail, here is more about the 'Formula Grant" as explained by Leeds City Council in response to a question they were asked, "the Council is compensated to some degree by central government funding for the extent that it has had to grant student Council Tax exemptions and discounts. This funding is reflected in the annual local government finance settlement which distributes Formula Grant among the various local authorities. The Formula Grant distribution mechanism is based on a complex formula, one aspect of which takes account of the relative ability of different councils to raise council tax (known as "resource equalisation"). The variation in the level of exemptions and discounts for Council Tax for students is compensated to some extent through this resource equalisation adjustment to the amount of
Formula Grant allocated to each local authority, but it is not a like-for-like relationship. In fact there is a strong school of opinion in local government circles that the reduction of central government funding for local authorities in 2011/12, and its further erosion in the 2012/13 grant settlement, will significantly undermine the effectiveness of the compensation a local authority receives for student Council Tax exemptions and discounts.")

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Written & oral information and advice from the Portsmouth & District Private Landlord's Association is given in good faith, but no responsibility whatsoever is accepted by the Association or it's officers for the accuracy of it's information & advice nor shall the Association be held responsible for the consequences of reliance upon such information.

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