College welcomes plans for ‘rent- a-room’ tax break

Thursday 15 December 2022

Jersey's politicians are on track to implement plans to give islanders a tax break for renting out a spare room - something the Principal of St. Brelade's College believes will help the island deal with the current housing crisis.

Yesterday they supported moves, by 32 votes to 15, to exempt income from lodgers of £10,000 or less from income tax per year. It's now part of the overall Government Plan, which is expected to be agreed in the coming days.

According to the Council of Ministers, who proposed the amendment, providing a new tax relief would help create extra accommodation for seasonal workers.

It would also enable homeowners to retain extra income at a time when some households are struggling, ease overall accommodation issues and encourage better use of existing housing stock.

The amendment was welcomed by St. Brelade's College, a organisation which has managed the placement of overseas students in local homes for around 45 years.

The local language school has been calling for islanders to get a tax break when renting a spare room in their home for many years, after seeing the number of lodgings available for their students drop by a third over the last decade.

Pictured: St. Brelade's College provides English courses to international students who also take part in extra-curricular activities and spend time with their host families in the evening to fully immerse themselves in island life.

Sid Brown, Principal of St Brelade's College, explained: "In our experience, many prospective hosts are deterred by the fact that they have to declare and pay tax on the income, possibly because they are scared they may fall foul of the tax department and are often unaware that there is a 50% reduction in the tax rate if they provide meals.

"In simple economic terms, the fewer home-stay places we have, the fewer students will come to Jersey resulting in less income for local households, teachers and suppliers not to mention airline and ferry operators. In our view, this scheme will result in a net gain by increasing capacity while at the same time eliminating the totally unnecessary administrative costs of overseeing this tax."

Pictured: Sid Brown, Principal of St Brelade's College, explained that the tax relief would offer more affordable accommodation to potential visitors and workers, promoting the local tourism and hospitality industry.

Addressing concerns that incentivising households to utilise a spare room to take in a lodger would encourage sub-standard accommodation, Mr Brown argued that the development of this sector will improve the overall provision through creating more choice and a more competitive environment, enhanced by organisations such as St Brelade's College and AirBnB that provide oversight and regulatory compliance.

At a time when households are facing the soaring cost-of-living increases and rising mortgage rates, Mr Brown believes that it "makes sense to incentivise and reward households that are prepared to work harder to supplement their incomes while at the same time helping the island with the current housing crisis we face".

Pictured: Pre-pandemic host families were excited to welcome students into their homes, however the college has noticed a sharp decline in local families offering to host students post-covid.

The St Brelade's College Principal explained that hosts come from a wide range of backgrounds, including families with their own children or whose own children have left the home, retired couples, same sex couples and single people who all host for a number of different reasons.

"We are proud of the many examples of our hosts going to extra lengths to make their students feel welcome and make lasting ties to our island," he said. "They are contributing not just to our economy but to the overall perception of our island around the world."

Mr Brown added: "We look forward to welcoming new hosts to take advantage of this scheme and find out more about the wide range of financial and non-financial benefits involved in hosting."