A series of recommendations to combat the student accommodation crisis by the Higher Education Authority (HEA) were removed from a government report.
The HEA recommended that the construction of student accommodation be subject to tax reliefs which were rejected by the department after consulting with other bodies.
“We don’t create government policy,” the HEA press office told The College View about their involvement. “It’s a political decision over what steps are taken.”
A Freedom of Information (FOI) request by the Irish Times showed that suggestions to eliminate the Local Property Tax (LPT) for on-campus housing and zero VAT interest rates for student accommodation were ommitted.
The Department of Finance advised against any LPT concessions in their response to the HEA asking: “Where is the justification for LPT [property tax] exemptions when local authority and other social housing is subject to LPT?”
Currently, the only bodies exempt from the LPT are charities.
The FOI-obtained document also showed that the department rejected the proposal that the construction of student accommodation be VAT-exempt because it violates the EU directive on VAT.
The idea of a zero VAT rate for accommodation would be to incentivise the private sector to take up construction, as it would bridge the gap between cost and return.
In a statement to The College View, the Department of Education declined to comment on the rejected proposals, but commented on proposals they accepted. This included the 30,000 grant for the Homes for Study Scheme campaign run by the USI.
It also accepted the creation of an ‘inter-departmental steering group’.
“This group will provide a coordinating mechanism to ensure that the higher education institutions have access to information on new potential funding and delivery models.”
It also mentioned the Construction 2020 plan which will address the housing shortage.
“This will not resolve all of our problems immediately, but the Minister is confident that the implementation of Construction 2020 will provide us with a sustainable housing stock in the medium to longer term.”
<strong> Aura McMenamin </strong>
<strong> Image credit: Chaitanya Brady </strong>