The breakthrough on council tax and HMOs, announced just before the weekend, may not be all that it seems.
That’s the view of one legal expert who says the change may not benefit all types of HMO, meaning some landlords will remain out of pocket.
Currently, the Valuation Office Agency is working through the entire HMO market re-assessing each room in an HMO as a separate unit for council tax purposes and assigning them their own band - which then makes the tenant responsible for band A council tax.
This means that each tenant of HMOs must pay an individual council tax bill, which will be far higher than their share of the amount charged for the whole property and means tenants can no longer enjoy a single monthly charge that includes council tax, energy, heating and rent.
The government says it 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.
This could, in theory, save renters in shared housing up to £1,000 a year.
However, one legal expert says the wording of the initiative leaves the fate of hundreds of thousands of tenants in the balance.
Phil Turtle, the compliance director at Landlord Licensing & Defence, says: "On the surface, this is good news for HMO tenants and landlords. Or at least for shared-facility HMOs defined under Section 254(2) of the Housing Act.
"It's not so good for section 257 converted building HMOs. However, these look like proper flats and the treatment was to be expected.
"What no one seems to have taken account of is the many tens of thousands of Section 254(4) HMOs, where some of the bedsits have kitchenettes and en-suites - as demanded by the market - but one or more of the bedsits in the building has private essential facilities outside their bedsit door.
"For example, the bedsit may contain a kitchenette, but the tenant has to exit the bedsit and trot down the corridor - and in old Victorian properties down three or four steps - to the rear half-landing, to his or her private bathroom.
"Or they may have an en-suite in their room but their private kitchen - which probably used to be the communal kitchen before the larger rooms were upgraded to have kitchenettes - is across, or along, the corridor to what has now been allocated to that tenant as their private kitchen - one that is not shared with anyone else.
"It is essential that it is made clear in the legislation that ALL Section 254 HMOs - including s254(4) - are treated as single houses for council tax, otherwise the apparent win will be somewhat hollow for hundreds of thousands of tenants still forced to pay individual council tax bills."
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