HMO COUNCIL TAX being changed on each room!

by Readers Question

7:39 AM, 15th August 2017
About 3 years ago

HMO COUNCIL TAX being changed on each room!

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HMO COUNCIL TAX being changed on each room!

Hi all, I have a bed HMO which consists of having all en-suites. I’ve been battling with the local Council reference council tax since obtaining planning permission and once fully finished. As all landlords know council tax is very expensive!!

The council classed the HMO rooms as “self contained”, however after having number of site visits and local planning enforcement on site valuation office classed the property as a HMO. Now Aug 2017 valuation office have wrote letters to all tenants stating they are liable for council tax and have billed me £14,000 due to seeing the plans before in 2014 and now they say there has been have been some ” alterations ” ( en-suite in rooms), which was done when planning was put in 2014.

The valuation office doesn’t know what they are doing after number of calls and messages they still not understand. Has anyone been thought this traumatic time ???

I await messages of how you overcame this situation.



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paul thomason

10:58 AM, 28th August 2017
About 3 years ago

i have a 6 bed hmo the council charge 3 rooms with full council tax others 1 council tax , if you make the rooms ensuite and you have a license , thy just look at this , but i like other readers will make each room 1 flat after 4 years get historical use . play the councils at there own game

Ian Narbeth

12:33 PM, 1st September 2017
About 3 years ago

Reply to the comment left by Jim S at 27/08/2017 - 11:39
Sorry but this is an incredibly bad idea. As soon as you sell the first room/"flat" (assuming anyone is fool enough to buy such a lease and pay you a premium) you are committed. If the other rooms/"flats" don't sell you will be stuck with a tenant sharing the common parts of the building and the remainder of the HMO in your hands. Try getting a BTL mortgage on that dog's breakfast.

Colin McNulty

15:19 PM, 2nd September 2017
About 3 years ago

Re the removal of the student council tax exemption, currently central gov't compensates local councils from central gov't funds for that exemption, but the gov't is stopping that.

Liverpool council is currently leading the way in lobbying Westminster to look at ways of taxing student landlords, either through council tax, or business rates. See here:

Jay James

18:32 PM, 2nd September 2017
About 3 years ago

Reply to the comment left by Colin McNulty at 02/09/2017 - 15:19
Oh dear, I had hoped that like me, you were just being negative about landlords being hammmered every way possible. The article you linked couled be the thin end of the wedge such as with other anti landlord measures by councils such as Newham Borough and Liverpool. 'Duncs' comment just after the end of the article is right on the money.

Chris Baker

13:46 PM, 4th September 2017
About 3 years ago

Hello Rahul

The problem causing the council tax issue is that you have created self-contained units. Maybe I can help?
I had a similar (much less of a scale) issue with a house I purchased that had an self-contain annexe which the pervious owners had built, interestingly the council at the time said they do not increase council tax to extension/improvements to the owning developer, however they do when it is sold.

Having checked their rules on what defines self-contained, other than bathroom facilities, I found that provided there is no food preparation area (even as little as making a sandwich or cup of tea, and washing up) then the room was not classed as self contained very importantly it wasn’t just that there were no facilities it was also that there were no temporary disconnections of service connection that could facility the same.
The complete self-contained element was nothing that I required, I was happy to share a communal kitchen and food preparation, I had all the service connections to a would be kitchen completely removed. This satisfied the council.

You are likely to know the potential cost to you of covering the full Council tax on any vacant rooms over a year, you could turn a rental room or two into communal kitchen/s for the whole house, you would lose rent to these rooms all year round, but potentially it would be cheaper for you. There would be another benefit to this, which is the cost to your tenants would just be rent and not also the council tax as I guess you will be seeking to change your agreements so you will no long cover council tax whilst the room are otherwise let. As you say other HMOs in your area have been hit with the same, the price of rooms will go up, by removing the individual council tax liability element with communal food preparation areas you have potentially to increase your existing rents by half or more of the would-be council tax, potentially more than covering the loss in rent of losing rental rooms to form the communal kitchen/s, if the figures work you could be better off. < enter section 24, theres another story.

While your rooms are self-contained have you looked into the possibility of creating leasehold units and selling them? you could retaining the freehold for your legacy, you might even be able to wangle a mortgage.

I hope my words are of some help.

I want a way to turn most of my tenants into co-owners if anyone reading this has any ideas as to how this could still be profitable please get in touch.

Reagards kris

Jamie M

22:48 PM, 7th September 2017
About 3 years ago

Reply to the comment left by Harlequin Garden at 15/08/2017 - 08:38
One way to stuff them is to give notice to your current tenants, then take on DSS tenants in each room and give each an AST stating its their responsibility to pay all bills, then you'll pay no council tax.
The bar stewards are after us every which way

Harlequin Garden

22:54 PM, 7th September 2017
About 3 years ago

Really? Whenever I've had a tenant on DSS or whatever it's called they think the rent/housing benefit is a bit of extra money for them.

My rent was clearly too low - or I dealt with the whole episode far to generously as my tenants stayed bar one who left when her 6 months was up and another who went back to Portugal.

I'd rather have a full house with less rent and good working tenants than a houseful of DHS hanging around all day looking for trouble thank you.

The issue now is paying the council tax should someone leave and there's a void - it's not happened yet, but an empty one attracts full council tax yet one person can live there with a 25% discount - total madness.

Jamie M

22:59 PM, 7th September 2017
About 3 years ago

Reply to the comment left by Harlequin Garden at 07/09/2017 - 22:54
Agreed, they are mostly feckless scroungers who prefer to drink the rent. I have a mate with 900 rooms who only lets to them and targets the best ones, older men with nothing left to look forward to, they tend to be there for years.


12:23 PM, 6th February 2019
About 2 years ago

Hi there! Once again the issue of Council Tax banding raises it's head. I have an HMO which was converted in the 1990's. Happy to pay CT as one big property, but recently re-fitted what was a commumal kitchen out as a seperate bedsit, as all the other rooms have their own kitchenettes. This was unwittingly advertised as a flat, by the agents, which it effectively is, although there are no seperate supplies for services, heating and washer/drier in the cellar is shared with rest of house. Happy to hold hands up and pay tax on this unit...however, the Council are now saying they want to charge seperate tax on the remaining 7 bedsits, which all share toilets. I have trawled thro the legislation, but it's like a minefield! Spoken to RLA, NLA, BRA and the valuation office. Even tried JustAsk online solicitors, but no one seems clear on the definition of a bedsit, and when a bedsit becomes a flat!? To be blunt, to add band A CT (albeit with single person discount) to the £350 pcm rent I charge on a small bedsit would make it unviable for the tenant and unsustainable for me as a landlord...and may well put me out of business. The letting agents are mystified, and say out of all the hundrends/ thousands of tenants/landlords with similar properties, they have never heard of this before. Surely there has to be some hard and fast guidelines within the Housing Act etc, or are the local council at liberty to move the goalposts as they see fit. Can anyone help? Is there any recent caselaw which would be helpful?
Cheers, Heather

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