Council tax per room for HMO in Nottingham!

by Readers Question

10:36 AM, 12th February 2021
About 2 months ago

Council tax per room for HMO in Nottingham!

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Council tax per room for HMO in Nottingham!

Hello all, I wanted to make fellow landlords and agents aware of a situation we are facing in Long Eaton, Nottingham. A recent ruling by the Valuations Office has ruled that a newly converted building providing 8 luxury ensuite bedrooms (HMO) is to be classed as separate dwellings and each tenant will be liable for council tax. The VAO is saying that because there is an ensuite and a lock on the door it is a “dwelling”. All the other facilities are shared in the house.

This newly converted, beautiful HMO has now had the rug pulled from under its feet. We have had to communicate to all tenants that the council will be pursuing them for Council Tax. We manage an HMO in the same area with 8 ensuite bedrooms, the same setup and there is only 1 Council Tax. It means this property is now not on a level playing field compared to its competitors. It is madness. So the once affordable ensuite bedrooms have suddenly become unaffordable and uncompetitive as each tenant is looking at a council tax bill of around £100 a month after the single person discount has been applied.

I find this ruling completely wrong and more importantly a devastating ruling for single people – young people trying to gain independence, saving for the first home, marriage breakdown, so many reasons why people need, good quality, affordable shared housing.

The landlords are trying to campaign the Valuations office to demonstrate that they are being unfairly treated. The council say it is nothing to do with them as it is the Valuations Office that decides. Looking at the comparables in terms of local HMOs, none have had their rooms classed as “dwellings”. Only bedsits are classed as “dwellings” and that I understand.

I’m an agent and a landlord. We have multiple HMOs. This ruling sends a shiver down my spine for the future of HMOs.

Does anyone have any experience of this?
Many thanks.

Amanda

Comments

David

11:20 AM, 13th February 2021
About 2 months ago

Reply to the comment left by Harry Chunk at 12/02/2021 - 10:52
I have 3 HMO’s and about 8 years ago the valuation office decided that each bedsit must pay there own council tax even though they have their own cooking facilities they do not have their own toilet or shower they share with others in the house.
I appealed and failed to get it changed I even involved a local councillor because of the injustice but no change. These are working tenants that are in jobs that do not pay a fortune but have to pay over £70 a month Council Tax (the same as a small house/flat) even though they do not live in a self contained home and have to share a bathroom.
The properties are in Portsmouth.

terry sullivan

18:12 PM, 13th February 2021
About 2 months ago

does this mean that students are no longer exempt?

Mark

18:19 PM, 13th February 2021
About 2 months ago

I believe Wendy Whitaker Large may have recently won an appeal against this.
https://podcasts.apple.com/gb/podcast/the-hmo-success-podcast-with-wendy-whittaker-large/id1520175920?i=1000505534337

Daryn

18:29 PM, 13th February 2021
About 2 months ago

Reply to the comment left by David at 13/02/2021 - 11:20
Hi David

I too am based in Portsmouth and would be keen to discuss this with you as I’m in conversation with PCC over this matter and I believe there are not many of us in this situation in Portsmouth. My email is daryn@propods.co.uk Thanks

Rob Crawford

9:55 AM, 14th February 2021
About 2 months ago

This is interesting. It would appear that the VOA has amended their definition of what HMO rooms should be council taxed separately. See https://www.gov.uk/guidance/understand-how-council-tax-bands-are-assessed#banding-of-houses-in-multiple-occupation. Under the Examples section it now states either a kitchenette or ensuite (not both, as before) could justify this. Quote, "HMOs with adapted letting rooms: Separately let rooms in a HMO may have been adapted, for example, so that they have their own kitchenette or separate shower/bath and WC. They will be given their own band even though may share some facilities. In making a decision, the VOA will look at the degree to which each part has been structurally altered." Whether or not this is a legal definition needs to be argued!

Wendy Whittaker-Large

11:07 AM, 15th February 2021
About 2 months ago

HMOs and Council Tax - A discussion
Have you been affected by the re-banding of your rooms?
Has the VOA issued council tax bills to all of your HMO rooms as a result of a recent conversion to an HMO?
Please come along to an online meeting I am holding tonight to find out what is currently happening with HMOs and CT re-banding of rooms. If you have been affected, or worried about what is happening, we would love you to join the meeting.
Please register even if you cannot attend as we will send out a recording to all those who register.

Feb 15, 2021 07:00 PM

https://zoom.us/webinar/register/WN_FYWRrmLiR0qPtIesre_8Dg

Richard P

19:42 PM, 24th February 2021
About 2 months ago

I am not an expert , but I would say that for each to be a separate dwelling each would need its own gas , electric and water meter and for there to be no shared facilities at all

MargaretM

8:20 AM, 25th February 2021
About 2 months ago

Reply to the comment left by Richard P at 24/02/2021 - 19:42
It is for the VAO to assess and in their guidance they make no mention of meters for utility supplies. They appear to have adopted a harsh approach that cuts across the whole idea of an HMO.
Appeals are needed to get more clarity on the issue.

Richard P

9:31 AM, 25th February 2021
About 2 months ago

I think there needs to be an appeal , an en-suite does not make a property a self contained dwelling, it would need its own kitchen, and also ideally its own electric, gas and water bills. This is just sheer greed why on earth should someone pay £100 a month council tax for a room and most tenants request a lock on their door. I have always had a feeling that this was the way councils were heading with HMO's

I am afraid I do not have the answer but I am as annoyed as anyone that this should even be being considered,

Rob Crawford

11:51 AM, 25th February 2021
About 2 months ago

The VOA page given on my earlier comment states that it depends on "the degree to which each part has been structurally altered". But this is very open ended! It implies you could have an ensuite in a room that was originally built as such with no added council tax penalty, but if you add an ensuite that includes structural changes then you would be charged council tax on that room. So the degree of allowable structural change needs to be defined! But where is the legislation that supports this???

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