I may have to sell after Council Tax reassessment increase of £100pm per room?

I may have to sell after Council Tax reassessment increase of £100pm per room?

11:30 AM, 27th March 2017, About 5 years ago 42

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I have 5 large properties in Aberdeen which I let out room by room to long and short term professionals.

I pay the council tax bill and all utilities and then charge the tenant a flat monthly rent.

However, I’ve just been informed by the Grampian Assessors office, that EACH BEDROOM will now be classed as an individual property entered on the valuation roll even though the rooms are not self contained (the showers/kitchens are shared) and as a result will be all subject to Band A council tax.

This means and extra £100 per month per room costs. I have 40 rooms!

Unfortunately, the market wont stand a rent rise of £100 per month per room (the average rent I charge is £425) and I can’t carry that amount so I’ll probably have to sell up.

It seems a bit strange that the Valuation roll will be changed to show 40 properties which clearly there are only 5.

Isn’t this a huge distortion of any city’s valuation roll?

Is there any other landlord facing the same situation?

Many thanks



by Rob Crawford

12:40 PM, 27th March 2017, About 5 years ago

I think the question here is whether your rooms have been correctly assessed for individual council tax charges. If you don't agree with the council's conclusion you need to challenge it. Hopefully some legal readers can respond with some direction on this. Are you a member of NLA / RLA? They maybe able to help.

by Karen

13:01 PM, 27th March 2017, About 5 years ago

Hello Rob
Thanks for your comment. Im a member of SAL and they advised it was too complex an issue for them to be involved.
As a lot of the guests are foreign and only stay for a few months at a time, chances are that by the time the correct paper work for CT is raised - they'll have returned home making it impossible to collect any tax. It's an admin nightmare but as the assessor told me this morning - tax collection wasn't his problem.

by Barbara Goulding

13:16 PM, 27th March 2017, About 5 years ago

Hi. Re room assessment increase for council tax in Aberdeen from Karen - is this only in Scotland or is it about to be all uk thanks Barbara

by Michael Holmes

13:36 PM, 27th March 2017, About 5 years ago

Hello Karen,
There is no organ of the state more prone to flights of fancy than your local or county council. From what you are saying,your properties are HMO's. They occupy a specific niche in the hierarchy of housing descriptions, the main one being that your buildings are home to several un-related families. The point being, that they are housed in a single building. On that basis, if the tenants are sharing most of the facilities, they cannot be living in separate self contained "houses" so you should challenge this interpretation immediately.
Good Luck

by Luke P

13:38 PM, 27th March 2017, About 5 years ago

This is now spreading across the country's councils. I think it's the RLA who have been trying to negotiate a separate 'room rate' for tax (approx. £600pa), but I don't think that has happened yet.

by David Price

15:41 PM, 27th March 2017, About 5 years ago

If each room is to be taxed separately then it is up to the occupant to pay the tax, not the Landlord. Inform the council of the occupants and leave it to them to collect (or not) the council tax. Meanwhile do not reduce the rent for you may eventually end up paying exactly the same tax as at present.
This is a trick which has been tried in the deepest south east of England and all the landlords concerned are fighting tooth and nail. One was even asked by the council to reduce the rent so that the tenant could still afford the property.
This is effectively poll tax by the back door.

by Luke P

16:01 PM, 27th March 2017, About 5 years ago

Reply to the comment left by "David Price" at "27/03/2017 - 15:41":

Unfortunately when it comes to HMOs, it falls to the landlord for Council Tax liability, which is why LAs love it so much.

by Tobias Nightingale

16:47 PM, 27th March 2017, About 5 years ago

Reply to the comment left by "Luke P" at "27/03/2017 - 16:01":

I'm not a expert but I would imagine if it is just banded a individual dwelling then it would no longer be a HMO though? And as such would be payable by the tenant Am in correct in thinking a 'joint tenancy' would remove the chance of this?

Maybe this would be a case for the great people of property 118 to levy a case against that constituency? like they did for some mortgage lender if I am not mistaken.?

by Robert Mellors

16:51 PM, 27th March 2017, About 5 years ago

One possibility may be to let the whole house to the residents on a joint tenancy for the same rent as you would have got letting individual rooms separately. That way it would be one property for Council Tax purposes and the tenants would be jointly liable to pay it (it would be classed as one property and the CT would be "apportioned" between however many joint tenants there were). It would then be up to the Council to chase each individual joint tenant for their respective share (apportionment) of the Council Tax.

If there are 40 rooms, across 5 properties, then that is an average of 8 rooms (residents) per property, so a single Council Tax bill of say £1200 divided by 8 tenants is just £12.50 per tenant per month (if all rooms are occupied). It makes the tenants liable instead of the landlord being liable. Landlord could, if he wished, reduce the rent by £12.50 pcm (or whatever figure it works out to) so as to compensate the tenants for them now being liable to pay the Council Tax.

When tenants leave, or new ones move in, then issue a new joint tenancy to everyone every time there is a change in household composition.

by Robert Mellors

16:54 PM, 27th March 2017, About 5 years ago

Reply to the comment left by "Tobias Nightingale" at "27/03/2017 - 16:47":

I believe that, a joint tenancy can still be a HMO, but if there is one tenancy agreement (AST) of 6 months or more, then that gives each joint tenant a sufficient legal interest in the property such that they can become liable for the Council Tax instead of the landlord being liable for it.

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