Exclusive: Council vows to make Home Office pay tax at Aberdeen student halls being used for asylum seekers – but how much would they get?

We disclose how much the UK government will save by relocating asylum seekers to Aberdeen student flats if the council gets its way.

City officials promise to “make the Home Office pay what they’re due” as they relocate Aberdeen asylum seekers from pricey hotels to “cheaper” student flats.

The UK government has started relocating individuals from hotels in Aberdeen and Westhill to disused student halls in Old Aberdeen and Rosemount.

It’s part of a larger national campaign to end the use of these motels, which were recently chastised by a local imam for leading to bad mental health among tenants.

But, having failed to halt the move, Aberdeen City Council is now devising strategies to capitalise on the situation.

And its finance head believes that this relocation plan will generate much-needed tax revenue for the cash-strapped local authority each year.

Can the council still win fight over student halls turned asylum homes?

Council planning experts recently determined that using the two buildings for asylum accommodation rather than student halls does not violate any rules.

It came after weeks of rising friction between the local authority and the Home Office, with municipal officials claiming the government is breaking the laws for their own benefit.

But doesn’t Aberdeen University need these student halls?

There have been speculations that Aberdeen University may still have some control over the Don Street properties, given that the student halls were built for them.

However, university officials have now abandoned all claim to the flats, emphasising that they “sold them several decades ago and retain no ownership of them”.

A university official added: “It is unlikely that the burden could be imposed to keep the properties for student housing. “At the time they were sold, there was a need to preserve access to student accommodation, but today there is enough student housing to meet demand.”

So, if things continue as they are, the two complexes will shortly lose their student accommodation classification and be converted into asylum houses.

This is when things get a lot more tricky.

Does the government pay any taxes on asylum homes?

As a general rule, purpose-built student accommodations are exempt from council tax if they are occupied by full-time university students.

And because Don Street House and Farmers Hall Lodge are no longer exempt from council tax or business rates, they will be subject to them.

Which one would apply in this case depends on how the buildings are classified after the change of use, with Mears Group, the Home Office provider, covering the tab.

Simply put, if the sites are designated as asylum hostels, they will be required to pay business rates; if they are categorised as houses, they will be subject to council tax.

In either case, Aberdeen City Council will profit from the asylum system, with all earnings going to the public purse and being spent on local services. These could range from road repairs to school enhancements. The only question is how much the local government could profit from the move.

Council finance chief: ‘Home Office will pay full amount they’re due’

According to the council’s finance convener, the former student halls in Old Aberdeen and Rosemount are no longer free from the council tax.

Alex McLellan explains that with the change of use, the two houses are now charged the same as any other residence in the city, even if they are used to accommodate asylum seekers.

The facts of “how this unique situation works” have still to be established with Mears Group, and the Home Office provider may find a loophole, he says.

However, as things stand, each flat will receive a council tax charge. Mr McLellan adds: “I believe it is critical that we get clarity on the associated liabilities for Mears Group.

“I understand both Farmers Hall and Don Street Halls are on the council tax valuation roll, and therefore they are liable for council tax.”

So how much could they earn in council tax from asylum homes?

It is difficult to estimate how much city officials could gain in council tax from the properties because there is no information on how many apartments are in each complex. But if we crunch the figures, we can get a reasonable estimate of the prospective earnings.

Farmers Hall, which is already occupied, can accommodate 130 people. Meanwhile, Don Street has 166 open rooms, and asylum seekers are anticipated to relocate from hotels in Aberdeen and Westhill in the coming weeks.

Given that there is a mix of smaller four-bed flats and larger ones that can accommodate nine people, it is safe to believe there are 20 to 35 flats in each.

And, with all of them currently in Band D, the local government may collect up to £57,200 in council tax on each property each year they are occupied. This would total more than £114,500.

What if Home Office provider needs to pay business rates?

In certain aspects, the council will benefit from Mears Group having to pay business rates rather than council tax. This has been the case with Aberdeen hotels serving as asylum accommodation thus far.

However, the non-domestic rates did not reflect additional income because the authority received revenue from the sites even when they were empty.

A Home Office spokesman previously stated that they are targeting localities like Don Street and Rosemount because they are “cheaper options”.

However, unless they can find a legal loophole to avoid this, they may end up paying more by using student accommodation.

According to the Scottish Government’s non-domestic rates calculator, the Sure Hotel on Lang Stracht, which once housed asylum seekers, has business rates of £52,900.

Meanwhile, the former Patio hotel on Aberdeen Beach costs far more, with £227,200 per year going back into the public purse.

The student halls do not have a price tag because they are not currently recognised as commercial property.

However, houses of this size frequently cost £60,000 or more. Mr McLellan is adamant that the student halls relocation should come at a price.

He clarified: “The Home Office said that they’re moving people here because it’s cheaper, and we need to make sure that we’re charging them the full amount they are due.” Mears Group has been sought for comment.

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