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Almost 10,000 houses exempt from council tax in Cardiff

Tewkesbury_StreetNEARLY 7,000 properties are exempt from council tax in Cardiff because they are occupied by students while the tax rate will increase from 5 per cent from April 1.

A total of 10,348 houses across the Welsh capital were exempt from paying council tax on January 1, 2015 and 66 per cent of them were properties occupied by students. Another 2,157 properties were exempt from the local tax for being unoccupied.

At the start of 2015, there were 5,883 houses occupied solely by students across the city, 87 per cent of which were located in Cathays and Roath alone, and 976 halls of residence.

Under the current system, tenants of houses with multiple occupancy (HMOs) are liable to pay council tax, but students are exempt from the scheme and landlords of student houses do not have to pay any council tax for their property. And this is not something Cardiff Council can change.

A freedom of information request shows 72 per cent of student HMOs were evaluated in between valuation bands C and band E. A speculative calculation based on the year 2014/15 band D rate, shows these properties could generate millions of pounds if they were liable to council tax.

But despite student being exempt from the council, it is argued the student community in Cardiff is overall beneficial for the city. In 2012, Gareth Carter, director of development at Savills’ Cardiff office, estimated the number of the students in the city, about a fifth of Cardiff’s population, could be worth £800m for the local economy for living expenses alone, and £1.3bn when fees are taken into account.

Karen Verallo, landlord for postgraduate student properties in Cathays, said: The fees for licensing each property and the costs of work required, when added to regular ongoing maintenance costs of properties are becoming prohibitive.”

Meanwhile, the council’s adopted budget for the year 2015/16 foresees a rise in council tax of 5 per cent, which corresponds to an increase of 93p a week and £48 a year for properties evaluated as band D.

Elizabeth Clark, Liberal Democrat Cathays councillor, said: “Local residents are angry that Labour run Cardiff Council have broken their promise yet again with their five per cent council tax rise, when they had promised to keep council tax increases to less than two per cent in 2012.

“I have called on the Labour party to apologise for breaking their promise to the people of Cardiff.”

Chris Weaver, Labour Cathays Councillor, responded: “The reason council tax is rising more than two per cent is that the cuts from Westminster have been deeper and are lasting longer than expected. Failed policies in Westminster are hurting people here in Cardiff.

“I think we had to make a difficult choice on council tax given the unprecedented severity of the cuts, which are much deeper than we feared in 2012.”

But the high concentration of the student population in Cardiff seems however to have revived a debate about the way in which landlords contribute to investment made in the area where their tenants live.

The mandatory licensing fee for landlords of HMOs is currently £700 per property and needs to be reviewed every five years for a £250 fee. In Cathays and Roath, special licensing has been put in place in an attempt to raise the standards of the rented properties.

But a freedom of information request in 2013, shows the council had a budget of £271,950 to manage the 1,600 registered HMOs, and only 50 per cent of it was covered by the income generated by licensing fees.

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