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Ministers back council tax change for HMO landlords

HMOs tax rebanding

The government is to end the practice of banding individual rooms in HMOs separately for council tax purposes, meaning that tenants of shared housing will no longer have to foot large council tax bills.

Following a consultation by the Department of Levelling Up, Housing and Communities, HMOs will be classed as a single property, simplifying administration for councils and landlords. The government will lay regulations later this year, with the policy change set to come into force before the end of 2023.


Some local authorities, most famously Portsmouth City Council, have seen HMOs as a potential source of extra tax revenue and ask the Valuation Office Agency to re-band properties to charge HMOs per room instead of per address. This has led to some tenants facing huge council tax bills, including those who have been threatened with back-dated bills running into thousands of pounds.

As a result of this announcement, the NRLA estimates that the average HMO tenant currently charged council tax on single rooms stands to save up to £1,000 a year - about 80% of the value of a typical ‘band A’ property.

Unjust practice

Chief executive Ben Beadle says: “We are delighted that the government has listened to NRLA and others and will end the unjust practice of charging council tax on individual rooms. Not only will it save tenants money, it means landlords will once again be able to let rooms inclusive of council tax, making it easier for renters to budget.”

The overwhelming majority of respondents to the consultation agreed that the current system is unfair; landlords raised concerns that the uncertainty around council tax liability creates a disincentive for investing to improve or modernise HMOs. Tenants raised concerns that they may suddenly become liable for a bill they were previously unaware of.

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Council tax