Student accommodation tax relief ‘open to abuse’

A TAX relief scheme to encourage student accommodation developments is wide open to abuse by rogue landlords because proper checks are not being carried out for compliance with the rules, the Labour Party has claimed.

The party’s consumer affairs spokesperson Kathleen Lynch made the remark as it emerged the Revenue Commissioners were unable to specify how many, if any, beneficiaries of the scheme had been audited last year.

More than €214 million in tax relief has been granted since the 1999 introduction of the scheme, which has helped supply 5,000 apartments or houses with capacity for 15,000 tenants.

A qualifying condition to benefit from the relief is that the developments must be occupied by students during the college term.

But it emerged at the Union of Students in Ireland (USI) annual congress in March that abuses of the rules by some landlords may be leading to higher rents in these complexes as apartments are being leased to non-students with higher incomes.

Following reporting of the claim by the Irish Examiner, Ms Lynch posed a number of Dáil questions to Finance Minister Brian Cowen on the issue.

He said in a recent reply that the Revenue Commissioners had no available figures on the proportion of the 14,214 audits it carried out last year which looked specifically at the Section 50 relief scheme for construction of student accommodation.

Although the Revenue Commissioners have said they are not aware of any significant abuses of the scheme, Ms Lynch said this is because they are simply not checking for them.

“They are effectively saying in a roundabout way that they are not inspecting these cases, which seems incredible to me,” she said.

“It’s like the human trafficking issue, people can say there’s no problem because they haven’t looked for it.

“It should be easy enough to carry out audits and go into a few complexes to find out who is living in them. But I’m quite sure from passing these developments in Cork that many residents are full-time workers and not students.”

The Revenue Commissioners have also followed up the Irish Examiner article and made contact with the University College Cork delegate who raised the matter at the USI congress. Mr Cowen said he has been assured that appropriate action will be taken if warranted.