The Welsh Government has confirmed that landlords, not tenants, will remain liable for council tax in HMOs, which will be valued as a single dwelling.

Its new plans align Wales more closely with the approach already taken in England and means HMOs will generally be assessed as one property for council tax purposes, rather than being split into multiple individual units.

It aims to address long-standing inconsistencies where some HMOs were treated as several separate dwellings, depending on their layout and facilities. It has meant variation between different areas, with some contract holders paying high bills and others not paying at all.

Consultation

Following a consultation, Mark Drakeford MS, Cabinet Secretary for Finance and Welsh Language, says this ends inconsistency and administrative complexity. He adds: “The Regulations will come into force on 3rd June 2026, apply to both licensed and unlicensed HMOs, and will not operate retrospectively. Owners of HMOs previously assessed on a disaggregated basis may make a proposal to the VOA to amend the valuation list.”

Propertymark agrees that multiple banding can create unnecessary complexity, increase disputes, and make it harder for agents to provide clear advice to landlords and tenants.

Ambiguity

“This removes ambiguity that has arisen in some cases where tenants were treated as liable, particularly where properties were divided into bedsits or units with separate facilities,” it adds. “For letting agents, this clarification is significant. It reinforces that council tax responsibility should be factored into landlord costs and management arrangements, rather than being passed directly to tenants.”

Changes were made in England in 2023 to reform policy through the Council Tax (Chargeable Dwellings and Liability for Owners) (Amendment) (England) Regulations 2023.

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