HMO rooms rated as Band A?
After having gained planning permission we recently carried out a renovation of a large house into a 7 bedroom HMO with all the rooms benefitting from their own en-suite, but still having to share kitchen and lounge facilities, and all services of electric, heating and Wi-fi included in the all-inclusive rent.
When the rating officer looks at the situation, he rates all rooms as Band A, not as an HMO!
My question to other Landlords caught in the same situation which I believe are many is:
Should it be necessary to re licence it as an HMO as they are now all “self-contained dwelling units” and paying their own Band A rates does the HMO planning still apply as the rating office has surely changed the category by making them independent dwellings, or would it be necessary to apply for a change of planning to not pay the licencing fees and having all the bureaucratic requirements surrounding such properties?
Anyone with experience in this relatively new situation?
Many thanks
Martin
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Property Tax Pains For Landlords!
Member Since April 2020 - Comments: 78 - Articles: 51
3:11 PM, 12th September 2021, About 5 years ago
Reply to the comment left by Terry Bibby at 11/09/2021 – 22:14
That was a very specific and quirky case where the LL won against the VoA.
Sadly the vast majority of appeals appear to have failed as VoA rely on a Hereditament being a dwelling (room) with its own lease (AST)
And then they band it! (And bandit it very apt!)
Member Since May 2017 - Comments: 763
9:14 PM, 12th September 2021, About 5 years ago
If you have students they are exempt from council tax
Member Since September 2021 - Comments: 8
11:10 PM, 12th September 2021, About 5 years ago
Hi.
Just bought a 6 bed HMO which was previously licensed, and now been contacted by the VOA with a view to valuating as multiple dwellings. When I asked “Why me?”, I got the following reply:
We were aware that extensions/ alterations had been made to your property prior to your purchase. For Council tax purposes extensions made by the current owner cannot be included until a relevant transaction, normally a sale, takes place.
We are notified by the land registry once the sale goes through and this triggers the report for us to investigate. The report was checked and at that point we became aware of the possible HMO. In view of this we have to investigate possible multiple bands.
Member Since September 2018 - Comments: 3508 - Articles: 5
8:36 AM, 13th September 2021, About 5 years ago
Blimey – all this makes my head spin. Another reason why I will not be going near an HMO and I am sure all this will backfire at some point. HMO LL’s cannot carry on with ever shifting sands surely, where you get screwed over at every turn? From what the previous poster says even if you buy an HMO that was not individually banded before, by becoming a new owner you run the gauntlet of being tracked now and collared! When will this onslaught of private LL’s ever end?
Member Since July 2013 - Comments: 1996 - Articles: 21
10:27 AM, 14th September 2021, About 5 years ago
Mohammed Shafiq’s information is very interesting. Something for purchasers of existing HMOs and purchasers of houses that have had works done to them who intend to convert to be aware of.
DSR, yes some landlords will get caught out but bear in mind:
“At the end of the day, the tenant pays for everything”.
If HMOs are taxed as multiple Band A properties then either landlords will require the tenants to pay Council Tax or they will increase rents, or both.
Member Since September 2021 - Comments: 8
10:35 PM, 14th September 2021, About 5 years ago
Just received further clarification: an application for a HMO licence can also trigger a report to VOA to look into it further.
Member Since January 2020 - Comments: 3
11:23 PM, 14th September 2021, About 5 years ago
Reply to the comment left by Mohammed Shafiq at 14/09/2021 – 22:35
How soon after HMO licence application will VOA contact landlords about banding?
Member Since September 2021 - Comments: 8
11:35 PM, 14th September 2021, About 5 years ago
Well, I bought the property (an existing HMO) and applied for a new HMO licence at the same time, and was contacted by the VOA 6 months afterwards. With a licence lasting 5 years, potentially a new valuation could occur at that frequency.
Member Since September 2018 - Comments: 3508 - Articles: 5
4:26 PM, 15th September 2021, About 5 years ago
Reply to the comment left by Ian Narbeth at 14/09/2021 – 10:27
but surely if the tenants LHR is capped to an HMO shared room rate, and there is not going to be any top up money coming from the tenant to pay anywhere near the amount to compensate for voids/damages (over the deposit ) and any CT band A liability for the LL, you will be always out of pocket?
Member Since July 2013 - Comments: 1996 - Articles: 21
4:53 PM, 15th September 2021, About 5 years ago
Reply to the comment left by DSR at 15/09/2021 – 16:26
My point is that if Band A becomes the norm in a locality, rents will rise or landlords will change their tenancy terms so that the tenant pays the Council Tax. This will make it even harder for tenants in receipt of benefits to rent.