Isn’t this just appalling about the tax law?

Owners are liable for UK tax on the rents they collect from students, but can receive the money before tax and reduce the amount they have to pay by offsetting expenses and debt repayments.

And isn’t this an indictment of the higher education system?

The National Union of Students vice-president for welfare, Izzy Lenga, said UK students were seen as a cash cow by overseas investors, and often had no choice but to take rooms in “overpriced glass towers”.

Lenga said: “Overseas investors make billions of pounds building luxury apartments and charging sky-high rents for students. There is a cost of living crisis and finding good-quality affordable accommodation is a huge barrier for low- and middle-income students attending our world-leading institutions.”

Building more student housing does rather reduce the cost of all student housing, doesn’t it?

9 comments on “Isn’t this just appalling about the tax law?

  1. It is hard to know what he is objecting to – assuming someone called Izzy is a he.

    Does he want lower quality housing? No more luxury flats but more bed sits? Twelve students to a room?

    Does he want students to be exploited by British landlords only? I think we should thank the kind people of Singapore for saving up their meagre salaries so that they can build us some nice student buildings without the rest of us having to. In most places DFI is seen as a good thing.

    Of course he does not mention the real reason why accommodation is so expensive – as TW has pointed out any number of times planning permission is costly.

    But I think we can all agree on a solution here – let them live in council housing. I think this would be ideal. They would not be exploited by International Cosmopolitan capitalism. There would be social ownership. The local government could play a useful role for a change. And above all, early exposure to the incompetence, corruption, and malevolence of State Socialism will surely put them off the idea for life.

  2. “…luxury apartments and charging sky-high rents for students.”

    I lived in something that was a bit of a dump when I was a student back in the 80s. Cheap though.

    I expect a luxury apartment would have been more expensive even back then.

  3. “…reduce the amount they have to pay by offsetting expenses and debt repayments.”

    No. Repaying the debt would be a capital matter and not a deduction against rent. Nor for that matter against CGT either.

    There is no tax deduction for repaying a loan taken out to buy a property.

    Well researched article then.

  4. The luxury student accommodation is almost exclusively rented by international students, since they seem to have deep pockets. Domestic students continue to squeeze into bog standard flats and terraces.

    So the NUS wants foreign students to live in hovels too, which will put them off coming to the UK altogether. And who can blame them, when U.S. universities offer campus accommodation resembling holiday resorts, with swimming pools and fitness centres to hand.

  5. This is impressive; he complains simultaneously that rents are too high because landlords are making too much profit, and that the amount of tax landlords pay is too low because their profits aren’t high enough.

  6. Building luxury apartments and forcing poor people to live in them is a whole new world of capitalist exploitation.

    Esp when they put you in the Fleet Prison for debt–just because you could not find non-luxury digs.

    Where is Mr Pickwick when you need him?

  7. RichardT,

    The more substantive allegation I’ve seen is that the companies pay their earnings to overseas companies for “management expenses” or similar, leaving little or no profit in the UK company. On the face of it this sounds like a flouting of transfer pricing regulations; or it might mean that transfer pricing rules need tightening up for certain types of services. Or it might mean nothing at all.

  8. @SMFS

    Izzy is a girl, judging by both the pictures and her NUS bio, which also helpfully tells us that Izzy prefers to be referred to by “she/her”.

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