£700 per room council tax!

by Readers Question

17:46 PM, 23rd October 2013
About 5 years ago

£700 per room council tax!

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£700 per room council tax!

I am trying to find out when council tax would become payable by the room instead of for the whole property.

I am not getting a clear answer from the valuations agency who keep coming back with it all depends on the layouts and
if its individual tenancies and what the tenancies actually say. council-tax-going-through-the-roof

I would like them to give me examples of both which they appear not to want to do.

If I created studios with their own shower room then a living room come bedroom with a kitchenette in it on separate tenancies.

In addition the studios would all share a utility room consisting of washing machines and tumble dryers and all access to the studios would be doors off the main front door, would they try and charge the council tax per unit?

Many thanks

Kathy



Comments

Mark Alexander

17:52 PM, 23rd October 2013
About 5 years ago

Hi Kathy

Presumably you are not planning to be a live in landlord?

If your tenants are students they will will be Council Tax exempt.

If your tenants are claiming benefits they may well get their Council Tax paid for.

Given that you will be creating self contained studio's with locks on doors and separate tenancy agreements I think you tick all of the boxes to justify Council Tax being payable on each room. I don't think a communal utility room will make any difference and all studio's have shared access so that will not make a difference either. Even if they also had a shared lounge I don't think it would change much.

Sorry, that's probably not the answer you wanted but forewarned is forearmed.
.

Joe Bloggs

18:59 PM, 23rd October 2013
About 5 years ago

i think the best way to find out what constitutes a separately rateable dwelling is to look at the relevant act. please post the answer!

Paul Maguire

19:10 PM, 23rd October 2013
About 5 years ago

Reply to the comment left by "Mark Alexander" at "23/10/2013 - 17:52":

I can't understand why you would want to do this. Individual units would each be charged at the Band A rate which is likely to be far more expensive than Council Tax on the whole building. Is it to avoid an HMO situation or is your market targeting vulnerable tenants. Would it not be more economical to rent room by room with shared facilities and lockable bedrooms? Putting in the required HMO necessities is a lot cheaper than subdividing a property [unless you've bought a jail].

Yvette Newbury

19:26 PM, 23rd October 2013
About 5 years ago

I agree with Mark. The simple explanation I have been given in the past has been if there are locks on bedroom doors the council may well choose to regard those as separate residences with council tax due on each room -each room would also require its own TV licence. The part about whether there are communal areas seemed to be secondary.

Industry Observer

21:31 PM, 23rd October 2013
About 5 years ago

Can someone explain to me how CT is charges on separate units?

Far as I am aware if all occupiers are on a single agreement they are the Tenant and as there is usually only one Council Tax bill per individual dwelling (individual as in self contained flats etc) then the tenant patys the bill (if there is one, students atc noted)

If you let on separate hybrid asts, tenancy on each bedroom and licence to share common parts, the CT goes to the LL who reflects a proprotion in each individual rent.

I fail to see the problem here.

Yvette Newbury

22:07 PM, 23rd October 2013
About 5 years ago

The difference:
Flat A - joint tenants under a shared tenancy agreement = council tax of £900 per annum for the whole flat;
Flat B - same size property but with 4 persons on separate tenancy agreements = council tax of say, £700 per annum for each room (£2,800 for whole flat)

In Flat A tenant will pay council tax of .£225 per annum
In Flat B tenant will pay council tax of £700 per annum.

I see a problem! Also any void periods and landlord will be paying council tax on each room at this rate.

I am sure there was a chap on this forum a while ago who had an 8 room property who was going through exactly this issue... the disparity in figures was much larger though as the council wanted to charge per room rather than per property.

MoodyMolls

7:27 AM, 24th October 2013
About 5 years ago

Hi Thanks for comments

Yes it appears they can put council tax on a room if individual tenant agreements and depending how the tenancy is worded. If people rent rooms then its normally because its a cheaper option for them. If they have to pay council tax at band A then this would put tenants off from renting the rooms.
The reason I would be more interested in studios , less voids more in demand also I could put in submeters for the gas and electric. If it was just the council tax for whole house as currently then I would be happy to pay the council tax and water rates. The problem is when they want it per room.

I remember getting an email saying landlords have suddenly started receiving bills for council tax via the room (back dated) More cuts from government so councils are looking at every angle to collect more money.

Info from website says
If you live in a flat or bedsit with some shared facilities, your home does not need to be entirely self-contained to be allocated a council tax band. For more information on the banding of flats and bedsits, contact your local Valuation Office.
So still grey area

Interesting it also mentioned that if access to the unit was from a shared lounge then its not subject to council tax. If I am understanding it correctly, but they could change this.

I think if they are charging by the room then they should create a new banding with a much lower rate.

Industry Observer

8:08 AM, 24th October 2013
About 5 years ago

Yvette

My comments were based on it bewing the same building, same units and occupiers but how the legal side is set up, how many agreements. Locks on doors are purely for privacy and p[ersonal security what matters is whether legally a unit is defined as self contained or not.

One thing not to do is call a bedsit a studio flat. A flat is only a flat if self contained, a bed sit is a flat that lacks an amenity i.e. a FULL bathroom or kitchen. Call a bedsit however modern and nice a flat and you start slipping down the slope of attracting CT attention and inviting it.

I am doing further research on this, but Kathy in effect Joe Bloggs is right.

Best thing to do in the face of any claims, allegations and desires by a LA (or HMRC) in respect of anything - LHA, CT, HHSRS, HMOs etc is if you disagree or it will impact on you adversely, ask them to quote SPECIFIC chapter and verse of the LAW/REGS that give the the authority and power to proceed the way they intend too.

Yvette Newbury

14:47 PM, 24th October 2013
About 5 years ago

Reply to the comment left by "Industry Observer " at "24/10/2013 - 08:08":

My example given was also same building, same units and occupiers, just a different application of council tax, decided upon by the council tax department and the cost implications of their decision on the rental model described. Yes of course a decision could be appealed but I always try to veer a course of avoiding the problem arising in the first place, rather than having to argue later.

Exactly right on always requesting specific law/regs that give that authority and then checking those out for yourself to ensure their interpretation is correct. I'm a Chartered Secretary so I do that as a matter of course, but with the internet it's fairly easy to check a particular section of an Act that you are quoted and check their interpretation of it to ensure you agree. They do get it wrong sometimes.


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