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Quick! Only days left to have your say on HMO tax

Landlords have only until Friday to have their say on levying council tax on HMO properties. 

This issue has been controversial in lettings circles for some time with the National Residential Landlords Association being particularly outspoken on it. 

Under the current rules, the Valuation Office Agency has the discretion to split an HMO up for council tax purposes, creating multiple bills for one dwelling. Under the current rules, if a landlord lets a property by the room - even if the rooms are not self-contained in any way - the VOA will usually have enough to justify creating multiple council tax bills. 


The NRLA says the application of this is inconsistent, but where it does happen it typically means that tenants become responsible for paying the council tax for their room. Increasing their costs by around £1,000 per year, while landlords face higher costs from multiple bills during void periods. 

To remain competitive with the market they will usually have to reduce the rent by the equivalent of the new council tax bill for the room, and on top of that landlords will often find it more difficult to retain tenants due to the council tax costs. 

The consultation proposes amendments to the council tax regulations via two options, each of which will see HMOs taxed as a single dwelling for council tax purposes with exceptions only for properties physically split into distinct self-contained units.

The first option involves changing the Council Tax (Chargeable Dwellings) Order 1992 so that listing officers must treat an HMO as a single property unless there are exceptional circumstances. The second option is that the government would, by an order, declare that all HMO properties are one singular dwelling for council tax purposes. 

Both of these solutions would be an improvement on the current system but the NRLA recommends that the latter option is preferred as it would be the quickest way to make all HMO properties pay one council tax bill in the future. 

NRLA chief executive Ben Beadle says: “I was delighted to hear the government has listened to what we had to say on disaggregation and has mooted plans to end this unfair practice for good. HMO landlords, especially those with more than one property, have seen council tax bill skyrocket through no fault of their own. 

“This is turn leaves them with little option but to increase rents at a time when the cost-of-living crisis is biting across the board. I would encourage members to respond to this consultation to protect both landlords and tenants, and scrap this unjust system for good.”

And Daryn Brewer - managing director of houseshare company Prop Pods, leading the Reform Group lobbying for change - adds: “It’s been a real battle to get this far and there have been a lot of people lobbying to get minsters to see that this is an unfair way of taxing tenants who reside in HMOs. We now need as many tenants and landlords as possible to complete the consultation and submit their responses.”

The consultation, for changes which apply only to England, closes this Friday, March 31, and you can see it here.

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

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    Well done Daryn, Wendy & Jon. There would have been no progress on this subject without you.

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    Where is the Survey there is. no Survey, just page after page of crap.
    Do you think we have nothing else to do all day messing around with this rubbish.
    Why don’t they go to the Toilet or something.


    Michael, write to the email address provided: council.tax@levellingup.gov.uk. There are 4 questions as well as basic personal details. But I agree, it would be much better just to provide a web form.

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    Am I right in thinking that this idea of taxing each individual is essentially a reintroduction of the hated Poll Tax, by stealth?


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