Consultation on single banding HMO rooms – Levelling-up and Regeneration Bill

Consultation on single banding HMO rooms – Levelling-up and Regeneration Bill

9:01 AM, 21st March 2023, About A year ago

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Please can Property118 post a request for interested landlords to respond to this consultation. The deadline is 31st March.

NC7 (New Clause 7) is Dame Caroline Dinenage’s amendment to the Levelling-up and Regeneration Bill and it will hurt tenants and landlords as the costs will inevitably be passed on.

“This new clause is intended to prevent the imposition of Council Tax individually on tenants of a room in a house with shared facilities, or in a licensed House of Multiple Occupancy.”

Following Caroline’s speech in parliament the government agreed to have a consultation, which has been published: Click Here

The consultation questions are:

  1. What are your views on the way that HMOs are currently valued for council tax?
  2. What are your views on the extent to which HMOs are currently not aggregated for council tax purposes?
  3. In your view, are there any particular types of HMOs that are more, or less, likely to not be aggregated? Please provide evidence where possible.
  4. What are your views on the government’s objective to deliver consistency of outcomes to the council tax valuation treatment of HMOs and to ensure that HMOs are banded as one property and have one council tax band, other than in exceptional circumstances?
  5. Do you have any preference as to how to deliver the government’s objective to ensure that HMOs are valued as one dwelling and, if so, why?
  6. What are your views on defining HMOs as set out in the Housing Act 2004?
  7. What are your views on defining HMOs using the definition in the Council Tax (Liability for Owners) Regulations 1992?
  8. In your view, is there any non-HMO accommodation that may be caught by either of the proposed definitions?
  9. Are there any other definitions that may be more appropriate for the purposes of identifying HMOs in the context of establishing a council tax band?
  10. Are there any exceptional circumstances or types of HMO accommodation that in your view should not be covered by these proposed changes and, if so, why would that be the case?
  11. Do you agree that, where separate areas of self-contained accommodation can be clearly determined within an HMO, the Listing Officer should be able to band each self-contained accommodation as having its own council tax band?
  12. Should the changes be limited to HMOs with fewer than a certain number of separately let rooms?
  13. Are there other approaches that you think should be considered to achieve the same outcome?
  14. When implementing the changes, do you agree that this should be done through the formal proposal route so that HMO landlords have the opportunity to make a proposal to alter their band?

Consultation Introduction:

“1. This consultation seeks views on the way that Homes in Multiple Occupation (HMOs) in England are valued for council tax, and on proposed changes to that process to ensure that HMOs are banded as one property and have one council tax band, other than in exceptional circumstances.

2. HMOs form an important part of the housing market, often providing cheaper accommodation for people whose housing options are limited. It is estimated that there are 500,000 HMOs in England. The nature of HMOs has continued to evolve over time, with improvements in quality and variation in size and types of properties. HMOs can provide affordable housing options for some of the most vulnerable and disadvantaged groups, such as those on low incomes. HMOs are also contributing to the regeneration of our high streets, with high quality HMOs being used to provide affordable accommodation for young professionals.

3. HMOs, as with all domestic property, are given a council tax band by the Valuation Office Agency (VOA). This is used to inform the calculation of the council tax due. Historically, HMOs have generally been valued as having one council tax band. In those situations, the owner of the HMO is liable for the council tax due on the property.

4. With changes in the quality of offer in some HMOs, there is a risk that legislation has not kept up with the improvements in the quality of HMO accommodation and how such properties should be treated for council tax. As a result, some HMO properties are being assessed in such a way as to attract a council tax band for each individual unit. This may discourage HMO landlords from making improvements to their properties, as well as acting as a deterrent to new landlords entering the HMO market.

5. The government wants to provide greater certainty and consistency in the way that accommodation in the HMO sector is banded for council tax, and to ensure that HMOs are banded as one property and have one council tax band, other than in exceptional circumstances. This consultation explores the scope of the issue, the current landscape for the valuation of HMOs and seeks views on proposed alternative approaches to achieving these objectives. It provides an opportunity for respondents to comment on whether the current legislative framework is appropriate and helps to deliver consistent outcomes, or whether a different approach is merited and, if so, how that might work and be targeted effectively.

6. Subject to the responses to this consultation, the government’s objective is to deliver a framework which will ensure that HMOs are valued as a single dwelling other than in exceptional circumstances. This would help to ensure that liability for council tax remains with the HMO landlord, and their tenants do not become subject to individual council tax bills. The consultation suggests alternative approaches through amendments to existing regulations. The consultation also provides an opportunity to reflect on how any potential changes might impact on other properties with shared living space and how government can mitigate any unintended consequences from any changes.”


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