UK Government Seeks Input on HMO Council Tax Valuation
Houses in Multiple Occupation (HMOs) are essential to the UK housing market, providing affordable accommodation for people with limited options. HMOs can range in size and quality, with many now offering high-quality accommodation and contributing to local regeneration. However, how HMOs are valued for council tax purposes has not kept up with changes in the sector, leading to uncertainty and inconsistency in how properties are banded.
The problem arises when a property has been "subsequently adapted for occupation by persons who do not constitute a single household", and it's been held that a room with its own kitchen and shared WC can be a self-contained unit for council tax purposes Clement ( LO) v Bryant and others 2003 RA 133.
In response, the government has launched a consultation to seek views on how HMOs are valued for council tax and how these processes can be changed to ensure all HMOs are banded as one property and have one council tax band.
We also published an article about a draft Bill trying to achieve the same thing (not sure if connected).
The consultation suggests that, in most cases, HMOs should be valued as a single dwelling and liability for council tax should remain with the HMO landlord. This would provide consistency and clarity in the banding of HMOs while preventing tenants from being subject to individual council tax bills.
The government is also seeking views on how potential changes might impact other properties with shared living space and how it can mitigate unintended consequences. Responses to the consultation will help shape the future framework for the banding of HMOs and provide landlords and agents with greater certainty in how their properties are valued for council tax.
It is estimated that there are around 500,000 HMOs in England, providing an important source of low-cost accommodation and playing an essential role in local regeneration. In light of the changes in the sector, the government must seek views on how the valuation of HMOs for council tax purposes can be improved.
The consultation provides a valuable opportunity for landlords and letting agents to have their say on the future of HMOs in the UK and on how their properties will be valued for council tax. By responding to the consultation, landlords and agents can help to shape the future of the sector and be part of the process of ensuring that the valuation of HMOs is more consistent and transparent.
HMOs remain essential to the UK housing market, providing affordable accommodation and contributing to local regeneration. The government's consultation allows landlords and agents to have their say on how HMOs should be valued for council tax and contribute to ensuring that HMOs are banded as one property and have one council tax band. By responding to the consultation, landlords and agents can help shape the sector's future and ensure that all HMOs are treated fairly and transparently for council tax purposes.
Responses to the council tax consultation should be made by 31 March 2023.
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View Related Handbook Page
In self-contained flats or houses, the tenant usually is liable for Council Tax. Landlords should inform the Council Tax section of the local authority in writing whenever someone moves in or out of their property or if it is empty.
Houses in Multiple Occupation (HMO)
Special requirements apply to types of properties known as Houses in Multiple Occupation (HMOs) which place special responsibilities on landlords and agents.