What is being done to tackle the VOA rebanding HMOs council tax?

Posted by Tungsten Management Group
Last updated 13th February 2022
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  • The background

    Within all the different types of properties that you can rent there are HMOs. These are houses in multiple occupation which are rented out by at least 3 people who are not from 1 household (for example a family) but share facilities like the bathroom and kitchen. It’s sometimes called a house share (Gov.uk). The main benefit from having a room in a HMO is that the rental costs are significantly lower that renting a 1 bed flat, plus all bills are included in your HMO rent per month. This is great from those who like to know exactly what percentage of their wage is placed towards their rent as the bills never fluctuate.

    The VOA is a  government department in England and Wales and values properties so they can calculate the council tax and for non-domestic rates. They are tasked with keeping the council tax list up to date so that the local authority can send out their council tax bills correctly. If you were to have any issues with your council tax banding or business rates banding then you must contact the VOA under Section 24 of the Local Government Finance Act of 1992. In Wigan we are undergoing a very length process of moving from business rates to council tax rates as we transfer the office into residential apartments - its a very long and drawn out process.

    The background
  • What are the VOA up to now?

    The current set up is very black and white and seems to working but is now being disturbed by the VOA. As a HMO landlord I cover all the bills for the Tungsten Management Group HMOs and there is one single council tax bill per property. The VOA have begun to challenge some landlords by issuing notices directly to the tenants requesting council tax per room. This has caused uproar from the tenants to a landlord who are unaware of the VOA plans. According to CT and HMO Lobby Group the request for council tax on a room by room basis would put costs up by 400%. This makes private renting impossible for many who are proud to have their own space in a shared house that they are fully responsible for and do not need any help from the state.

    A huge benefit for the local authority with the landlord covering the council tax costs is it would be a huge administrative task to update the tenants records each time they move property. The tenants who rent HMO rooms are very transient in nature. What about empty rooms to? Who is to be charged council tax when a room is empty even for a few days? UK councils are understaffed as it is, do they have the capacity to take on another role?

    If they do opt to band each room it would make good landlords like me rethink their position in providing HMO rooms. My room rental prices would be uncompetitive as a HMO room rental would begin to creep towards a 1 bed flat rental price, and many would opt for the privacy that a 1 bed flat offers over a house share. There is already a huge UK housing issue so this change would only fuel that fire further. You could also force some landlords who are not licensed (a HMO with under 4 rooms) to stay under the radar and avoid the per room council tax and remain paying one bill for the entire property. This comes with issues concerning health and safety of the property let, ensuring the property is managed properly, knowing where people are residing and many more issues. A short term financial win for the council could have long lasting issues for tenants, landlords and the community as a whole.

    What are the VOA up to now?
  • Whats next ...

    As it stands the CT and HMO Lobby Group are campaigning to remove this single room bandings that is inquitous, discriminatory and illogical. They are trying to educate the government on what implication this law change could have on renters, landlords and the private housing market as awhole.

    For further information please check out hmosandcounciltax.co.uk

    Whats next ...
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