Letting agents have backed the Government’s decision to reform the way HMO properties are banded for council tax.
Propertymark, which represents the estate agency sector, says in its submission to a consultation by the Department of Levelling Up, Housing and Communities that proposals to require all council to band HMOs as single properties and make the landlord pay the council tax are the ‘fairest and easiest approach’, rather than charging the tax ‘per room’.
Some local authorities, and most famously Portsmouth city council, have seen HMOs as a potential source of extra tax revenue and have asked the Valuation Office Agency to re-band properties to charge HMOs per room instead of per address.
As LandlordZONE has been reporting, this has led to some tenants facing huge council tax bills, including some who have been threatened with back-dated bills running into thousands of pounds.
Luckily for them the Government, keen to present as tenant-friendly, has stepped in with proposals to enforce a blanket council tax banding policy, helped via a strong local campaign in Portsmsouth supported by two MPs, Leader of the House of Commons Penny Mordaunt and Caroline Dinenage, MP for Gosport.
Consistency
Propertymark Regional Executive, Sophie Lang (main picture), who specialises in student lettings in the Cornwall area, says there needs to be consistency in the message the UK Government is sending, to ensure all councils apply the same rules.
“In Cornwall for example, the council does not adopt this stance, but two hours up the road in Somerset they do,” she says.
“Adopting a council tax room by room is not fair, and will increase costs for landlord and tenants, leading to higher rents.
“HMO is usually for people who cannot afford to have a flat on their own and is considered a cheaper way to live, but this will change if council tax is increased to this level.”
ARLA Propertymark President Elect, Greg Tsuman (main picture, right), who also specialises in working with HMOs, says: “While it may be reasonable to expect council tax to be linked to fair usage of the local amenities, the unintended consequences must be considered carefully.
Outdated
Head of Policy and Campaigns, Timothy Douglas (main picture, left), adds: “Propertymark is pleased that the UK Government has reviewed the outdated council tax banding system for Houses in Multiple Occupation.
“We know from our member agents that there is currently a lack of consistency in banding assessments that doesn’t take into account current property valuations and modern adaptations taking place within the sector such as energy efficiency improvements.”
Read the consultation details.
