Call for industry to lobby MPs over HMO council tax

A lettings network is urging landlords to back a campaign to abolish council tax re-banding for shared houses.

Platinum Property Partners says that for some time, the Valuation Office Agency has had discretionary powers to charge council tax per room as opposed to per property, making bills around four times more expensive for many landlords, in turn triggering rent rises.

An amendment to the Levelling Up and Regeneration Bill has been tabled by Tory MP Caroline Dineage seeks to reverse such measures and ensure HMOs are consistently classed as a single household for council tax purposes.

“The Valuation Office Agency has been applying council tax to bedrooms that are not self-contained spaces. This ultimately makes each bedroom a separate dwelling, resulting in the tenant being liable for council tax on a bedroom. This disproportionately affects young, hardworking individuals who are now required to pay council tax on a property which doesn’t fit the criteria” says Dineage.

“My amendment seeks to change the definition of a dwelling to include self-containment, so that we can prevent the imposition of council tax individually on tenants of a room in a house with shared facilities.”

PPP says over 200 of its landlords are already in the process of penning requests for support and a common sense approach from their own local MPs, and now the landlord network is asking other landlords to get on board for maximum impact.

Emma Hayes, managing director of PPP, says: “The time has come again for HMO landlords to stand together and strive for positive change in the private rented sector. Although HMOs have been at risk of council tax re-banding since the early 1990s, the actual occurrence has remained low, until now. With increasing requests from councils to re-band properties, it’s crucial we get the measures reversed so that landlords can continue to provide high quality affordable accommodation to their housemates.

“To put the impact into context, one particular HMO in the PPP network that was classed as a single dwelling in Band D had a monthly council tax bill of £1,223.77 in 2017/18. 

“Following a re-band to six individual units in Band A, the monthly bill rose by 200 per cent to £3,671.29, including a 25 per cent single occupancy discount.

“It’s a significant difference and prevents landlords from being able to provide tenants with an affordable rental bill that is often inclusive of bills. The administration is also an added management strain on landlords, who have to notify the council every time a tenant changes, and we are hearing reports that councils continue to chase old tenants for payment, even when the landlords are often authorised at third party payers.

“If individual rooms are suddenly billed as a separate units for council tax purposes, tenants will undoubtedly see their rents increased or no longer benefit from the level of financial certainty of having one all-inclusive monthly housing cost.”

PPP now wants HMO landlords to contact their local MPs to back the amendment.