By Mark Williamson
Property industry leaders have said investment in student accommodation projects in Scotland could be jeopardised if business rates are imposed on developments as proposed by MSPs.
The Scottish Property Federation expressed alarm that the Non-Domstic Rates bill under consideration by the Scottish Parliament proposes to bring student accommodation developments within the scope of business rates.
Scottish Property Federation director David Melhuish, said the imposition of business rates would strike a significant blow to the student accommodation sector and deter investors.
“Inflicting an additional charge in student accommodation providers, who already pay business rates on their commercial space. will have a significant impact on the high quality accommodation that this sector provides,” he said.
US firm enters Glasgow student accommodation market
Noting that student accommodation providers have built tens of thousands of homes for students in Scotland in the last decade, Mr Melhuish warned: “This new legislation will ultimately harness Scotland’s world class higher education system and the students who call this accommodation their home.”
The federation said members with interests in Purpose Built Student Accommodation developments had expressed serious concern without naming any.
PBSA projects in Scotland have won backing from a range of investors in recent years including overseas players.
They expect that demand for space in them will remain strong for years.
Property firms such as Summix have been able to capitalise on that support, Summix recently sold a 198 bed development in Edinburgh to a Singapore- based investor and developer HGD.
Singapore investors buy in to £30m Edinburgh student housing development
Summix development director Stuart Black said the firm was concerned about the proposal to levy business rates on developments.
He said the costs would ultimately be borne by the tenants of those buildings.
The Non-Domestic Rates bill was changed to bring student accommodation within the scope of the charge following an amendment tabled by Labour MSP Sarah Boyack.
The amended bill will be considered by MSPs for the last time in the third stage of the legislative process next month.
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