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Government to end council tax on HMO rooms
9:41 AM, 30th October 2023, 2 years ago
18
Renters in shared housing could save up to £1,000 a year thanks to a campaign by the National Residential Landlords Association (NRLA).
The Government has announced it will reform the way council tax is applied to houses of multiple occupation (HMOs).
Currently, some local authorities assess each room in an HMO as a separate unit for council tax purposes and assign them their own band.
This means that tenants of HMOs may have to pay individual council tax bills, which can be higher than the amount charged for the whole property.
Consistency in the treatment of HMOs for council tax
The Government wants to provide greater certainty and consistency in the treatment of HMOs for council tax, and to ensure that they are banded as one property and have one council tax band.
It also wishes to ensure that liability for council tax remains with the HMO landlord, and that their tenants are not subject to individual council tax bills.
The decision follows a consultation launched by the Department for Levelling Up, Housing and Communities (DLUHC) in February, which sought views on the council tax valuation of HMOs.
The consultation was prompted by concerns from landlords and tenants that individual rooms in HMOs have increasingly been assessed as separate units for council tax valuation.
Campaigning for this change for a long time
The NRLA has been campaigning for this change for a long time, arguing that it would save tenants money, simplify administration, and make it easier for renters to budget.
The NRLA estimates that the average HMO tenant currently charged council tax on single rooms stands to save up to £1,000 a year.
Ben Beadle, the organisation’s chief executive, said: “We are delighted that the Government has listened to NRLA and others and will end the unjust practice of charging council tax on individual rooms.
“Not only will it save tenants money, it means landlords will once again be able to let rooms inclusive of council tax, making it easier for renters to budget.
“We look forward to the necessary changes being implemented without delay.”
This is what the Government has announced:
3.2. Amendments to legislation
- The government will amend legislation to ensure HMOs are valued as a single property for the purposes of council tax. This will be achieved through amendments to existing legislation, including the Council Tax (Chargeable Dwellings) Order 1992 and related regulations. These amendments to legislation will apply to all HMOs (including both licensed and unlicensed HMOs).
Tags:
council tax, Council Tax Reform, HMO, HMO Council Tax Changes, Landlords, National Residential Landlords Association, NRLA, renters, Tenants Savings on Council Tax
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Member Since October 2020 - Comments: 1173
12:20 PM, 5th December 2023, About 2 years ago
Exactly as Meaces above says. The bigger news here, not being highlighted in the NRLA article is that from 1 December landlords will be responsible for paying the CT of ALL HMOs, including those let on joint tenancies. This change is also not limited to new tenancies, but will include existing tenancies where the tenants have up to December paid the tax. If the tenants stop paying the CT, the landlord will immediately become liable for it despite not having included it in the rent and despite not being able to unilaterally change the terms of the agreement or impose a new tenancy. This is a major issue for landlords and I don’t know why NRLA are not doing more to make landlords aware.
Member Since May 2014 - Comments: 620
1:32 PM, 5th December 2023, About 2 years ago
Reply to the comment left by David at 05/12/2023 – 12:20
What happens if the tenants are all students and would normally be exempt from council tax.
If the owner of the property is now responsible for CT does this exemption get transferred to the owner ??
Member Since October 2020 - Comments: 1173
2:58 PM, 5th December 2023, About 2 years ago
Reply to the comment left by Stella at 05/12/2023 – 13:32
Student exemption has always been passed to HMO landlords and I haven’t seen anything identifying a change there. The landlord will have to gather up the student certificates to prove the exemption and some Councils will charge landlords for student absences between terms.
Member Since May 2022 - Comments: 5
3:45 PM, 5th December 2023, About 2 years ago
Reply to the comment left by David at 05/12/2023 – 14:58
As far as I can tell Stella its now as David says above but I’ve yet to see how my council plan to do this. The problem for student landlords will be when a student drops out of their course and starts working, or they drop out of the tenancy and a replacement tenant isn’t a full time student, or they graduate with 2 -3 months still left on their tenancy – in all those cases the landlord will become liable for council tax and not the tenant as far as I can tell. The worst hit landlords at the moment will be those renting to working professionals sharing on one tenancy agreement as the landlord is now liable from 1st December. I don’t know if this is an unintended consequence of the new legislation but it seems one tenancy agreement sharer HMOs like standard student 4/5 bed houses have been lumped in with bedsit type “HMOs for council tax”. Currently my students liaise with my own council directly for their exemption and I’m not involved at all, but that may not be the case for all councils I think.
Member Since May 2022 - Comments: 5
4:18 PM, 5th December 2023, About 2 years ago
Reply to the comment left by Meaces at 05/12/2023 – 15:45
Unless the NRLA have got this wrong and the new regulations are intended to cover HMO’s for council tax only which used to be different to the housing act definition of an HMO. The NRLA have already updated their HMO tenancy agreement to reflect the new regulations so surely they are certain…….
Member Since July 2013 - Comments: 754
4:37 PM, 5th December 2023, About 2 years ago
Reply to the comment left by Meaces at 04/12/2023 – 15:13
My information comes directly from one of the key movers in the action (it wasn’t NRLA by the way).
The objective of the campaign was to arrest the indiscriminate and inconsistent rebanding of HMOs.
Further information can be found where.
https://hmosandcounciltax.co.uk/
Member Since October 2020 - Comments: 1173
11:57 AM, 6th December 2023, About 2 years ago
I agree that this was the purpose of the campaign and it was one I strongly supported. However, by sneaking in a change for HMO landlords by the back-door, the Gov’t may have created a time-bomb for many landlords and I suspect that if word gets around to tenants we will in a few cases see some nasty surprises for landlords when they suddenly get a bill because the tenant has stopped paying.
Member Since May 2022 - Comments: 5
3:43 PM, 2nd March 2024, About 2 years ago
Reply to the comment left by Meaces at 05/12/2023 – 16:18
NRLA have now changed their stance on this and believe as long as all the HMO tenants are on one tenancy agreement for the whole house the landlord will not be responsible for council tax – just like it was before