The Truss government faces its own '�poll tax' scandal as increasing numbers of HMOs in over 50 towns and cities across the UK are re-banded by the Valuation Office Agency (VOA) as containing multiple '�individual homes' rather than just one for council tax purposes.
This policy, which LandlordZONE has been told is seeing cash-starved councils benefit from local HMO re-bandings by the VOA, is most hotly-debated in Portsmouth, where tenants are now facing huge council tax bills.
Although the VOA has held the discretional powers to band HMOs depending on their adaption (based on the degree to which each part has been structurally altered or whether tenants have separate ASTs) for some time, councils are now requesting that the VOA look again at properties that before had been classed as '�one home' for council tax valuation purposes.
Several high-profile MPs are believed to now be taking up the gauntlet on this issue including Leader of the House of Commons Penny Mordaunt and Caroline Dinenage, MP for Gosport, the dockyard area of Portsmouth where many HMOs are to be found.
Dinenage tells LandlordZONE: "The Valuation Office Agency re-banding HMOs in my Gosport constituency is a blow for renters, causing financial uncertainty at a time when prices are rising. It's also a blow for the regeneration of our high streets, where executive HMO developments are breathing new life into town centres, reimagining them as places where we both live and socialise, work and shop.
"I am tabling an amendment to the Levelling Up and Regeneration Bill to try and see HMO buildings once again classified as a single household from a council tax perspective."
It has also been claimed that up to three million tenants who rent within HMO properties across the UK could be affected.
This is because the policy kills two birds with one stone '� raising more taxes but also artificially increasing the number of properties counted as '�housing provision' by local and national governments.
The re-bandings also mean that, for example, tenants within an HMO with six bedrooms will see their council tax rise six-fold '� a considerable increase given the other rises in costs elsewhere in their lives.
Instead of paying a shared council tax on a single property, each room is classified as a band A with tenants charged individually and only able to apply for a 25% single-person discount
LandlordZONE also understands that the VOA has been back-dating the re-valuations, meaning many tenants are now facing even larger, and often unaffordable, council tax bills.
Tenants are only just beginning to wake up to this and, as we reported earlier this year, one outraged tenant took to social media to complain.
'I'm literally in shock. My house is being re-banded so that it's six individual dwellings instead of one so we each have to pay council tax of �1254.90 per annum instead of our landlord paying it and they're doing this to all HMOs in Portsmouth with an en-suite,'� said Gegian Rose.
Daryn Brewer (pictured), who is one of the UK's leading HMO landlords, and who attended the recent Conservative Party conference in Birmingham, tells LandlordsZONE that he spoke to several ministers, none of whom were aware of the looming problem.
'One challenge is that VOA officers have total discretion when deciding to dis-aggregate a property from a single to multiple units, so neither tenants nor landlords can question it,'� he says.
Brewer also makes the point that, on the one hand, many councils are asking landlords to licence their properties as large HMOs while at the same time the VOA is classifying them as individual homes '� which is 'completely contradictory and unfair because building regulations, the Housing Act 2004 and the benefits system all count an HMO as one dwelling'�, he says.
Brewer has seen 68 of his bedrooms re-banded by the VOA as individual properties so far, which will benefit the local council to the tune of �72,000 a year extra income, a scenario that is being repeated across the UK.
Watch Ben Beadle's interview with Daryn Brewer.
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