Convert to HMO or Register for council tax or Sell?

Convert to HMO or Register for council tax or Sell?

11:26 AM, 23rd May 2016, About 8 years ago 18

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I have 3 HMOs 2 registered and one I was told was not registerable. I was told by the HMO man from the local council as it was self contained units so we just carried on as we were.question

I’ve now had a letter from the council/valuation department to tell me that as they are self contained they all need to pay separate council tax – which is madness as they are rooms with kitchen unit (all one modern) and a shower/loo. Electricity and heating is mine.

The decision I have now is whether to allow the valuation department to give them ‘values’ though I don’t know how they can, speak to HMO department to see how I can get it registered as an HMO – put in a communal area maybe and use up one unit? or sell.

I’m also wondering how far back the valuation people can go and claim in back council tax.

My feeling at the moment is to sell, it is mortgage free and with this new method of taxing interest on buy to let coming up I could reduce other borrowings.

Anyone with any experience of this area? – we were definitely not advised that the units were classed as council taxable – and didn’t think to ask.

Elizabeth


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Comments

Harlequin

16:12 PM, 23rd May 2016, About 8 years ago

... and then separate councils added their own bits and pieces and of course they all wrote their own regs, I have 1 in Lambeth and one in Wandsworth - like two different worlds.

Only those with their heads above the parapet of course comply and those that should and need to for the safety of their tenants (which after all is why the whole thing was set up) keep l o w.

Harlequin

16:14 PM, 23rd May 2016, About 8 years ago

Reply to the comment left by "Don Malaga" at "23/05/2016 - 14:52":

Happy to meet up - no idea how to contact you though

DM

17:27 PM, 23rd May 2016, About 8 years ago

Reply to the comment left by "terry sullivan" at "23/05/2016 - 15:42":

I agree but the councils change it to suit their needs. Before you know it - England will become another Wales and everyone will have no choice & License. Its not a bad thing but for those good landlords that try to follow the rules of the land are being penalised one way or another (council & Mr Osbourne) but that leads to more moaning!!

Stephen Parrott

23:01 PM, 23rd May 2016, About 8 years ago

Council Tax on HMO's is not consistently enforced across different Local Authorities and it is hard and frustrating to accurately anticipate cash-flow with the lack of clarity and a stated view point anywhere available from a given Local Authority

The starting point for assessment seems to be declared on Gov.uk website as, ....where there is separate household (room with a door and may be a lock for separate occupation) then this is deemed a separate "hereditament". (Look it up)!

If there is no modification, then the LA may take the view that the the separate rooms or "hereditaments" can be aggregated back in to a single Council Tax, so giving back the landlord what they could have taken away by separately C.Tax banding a number of rooms.

The trigger for separate assessment and getting a Tax Banding, often seems to be where there is deemed to have been alteration to the property in the addition of a shower, WC or WHB, and certainly if there is also a kitchenette of some sort giving a perception of self-containment to a large degree.

We had an additional C Tax banding on a small studio that had its own shower and WC etc, and in which we are prevented by the planners making a kitchenette, so it not truly "self contained", the tenant having to cross the yard to use the kitchen in the main house.

At the appeal which we did not win, my parting remark to the adjudicator was that, HMO C. Tax Banding and the seeming arbitrariness of it, was a little like "Schroedinger's cat" ( for those who follow Quantum Physics) which could be perceived to be in 2 dissimilar states simultaneously, both dead and alive.

In summary, it is not the "self-containment" that is the trigger for separate C Tax banding, it is the perception of there being a "separate household" and then the extent to which the building is adapted on an unspecified set of criteria which the LA's cannot disclose to the enquirer about the empirical data that they use, that could be given to make it clear for all.

Harlequin

9:06 AM, 24th May 2016, About 8 years ago

Reply to the comment left by "Stephen Parrott" at "23/05/2016 - 23:01":

That's good info, thanks Stephen. Sell it is then.

I had a revaluation done on a property I lived in with a basement flat - had open stairs from the main house into it but had a kitchen/bathroom and other rooms and the valuation officer valued it separately and then revalued the house to bring it into line with current values - so then two top rate property values - couldn't make it up really, went from £2,500 py to nearly £8,000. I explained that it was for our use and for a help for my husband who was very ill at the time, but she was determined - even the council didn't agree and said I should appeal - one reason why I just feel like putting my hands up on this one, life's too short.

I was also very surprised that the officer had gained access (property now in question) without me/permission and had a snoop around - I suggested that as she had emailed me she could always have emailed me for access and she said that she didn't need to, also refused to say how she'd gained access incase I victimised the tenant.

Graham Landlord

13:36 PM, 24th May 2016, About 8 years ago

Hi, you have two issues going on here. (1) Accommodation becomes liable for property tax, fundamentally if the occupier can live completely within their accommodation. So if it has food preparation facilities, toilet, shower and a bed even if it were all in one room, it is rateable. From your description they read as rateable! (2) I have a block of self-contained flats all independently rated, but because the building was converted in 1989 and thus doesn't comply with 1991 building regs, it is classed as a HMO. So a HMO can be independently rated. They are not mutually exclusive.

DM

16:33 PM, 24th May 2016, About 8 years ago

Good question - can't see a PM function here...!! maybe email? if moderators don't block this you can email me on donmalaga-at-gmail -dot-com --- (sometimes there is auto blocking of emails hence the typos!!)

Colin McNulty

13:36 PM, 31st May 2016, About 8 years ago

I've had a HMO rated by the room for council tax purposes by the VOA, even though 2 of the rooms are off-suite, i.e. you have to walk down a communal corridor and past the stairs, to get to their bathroom. There are mini-kitchenettes in each room and a larger communal kitchen.

It's classed as a HMO and has a HMO license from the council.

As it happens, because my tenants are all DSS it doesn't bother me, as it's simply an extra tick on their Housing Benefit application forms to also get Council Tax Benefit (CT Reduction now) for them and they're responsible for it. Although it's a ball ache when there's a void as I start getting the CT bill.

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