Welsh government proposals to clarify council tax banding for HMOs have had a mixed reaction from landlords – with confusion over who will be impacted.
HMOs in the country, as has been the case in England, have historically been banded as a single property, but some are being valued so that individual units have been given a council tax band, with each occupier liable to pay council tax.
The government plans to amend legislation and confirm that HMOs should continue to be banded as a single property so that liability rests with the owner or landlord.
In a consultation, 43% of respondents agreed with its policy, but 54% disagreed. It was welcomed by local councils and the Welsh Local Government Association as well as the NRLA and Propertymark.
A higher proportion (57%) did not agree with the proposed definition of HMOs as outlined in the consultation, although 35% - including landlords, councils and industry bodies - expressed support.
The report explained that many concerns appeared to stem from a misunderstanding of the proposed changes.
However, the report explained that many concerns appeared to stem from a misunderstanding of the proposed changes.
“Comments suggested readers thought the proposals to restore aggregation of HMOs would affect landlords generally of all properties, becoming liable for council tax themselves leading to higher costs and administrative burdens. However, the consultation proposals sought to maintain the existing and longstanding treatment of HMOs in the council tax system.”
It looks set to go ahead with its plans, as the report explains: “The Welsh government is committed to making changes which restore the longstanding approach to the valuation of HMOs in Wales as a single property for the purposes of council tax, and to ensure those rules are aligned with those in England.”
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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