Book a free 15-minute discovery call to understand your tax needs. Book Now
Find us on

Government to End Council Tax on HMO Rooms


Published on:

Table of Content

Table of Content

The UK government has announced a significant reform to how council tax is applied to houses of multiple occupation (HMOs), possibly leading them to end council tax on HMO rooms. In a move that is expected to benefit renters in shared housing, the reform aims to simplify administration, reduce the financial burden on tenants, and provide more consistent treatment for HMOs under the council tax system.

NRLA Campaign Yields Results

The decision to reform the council tax system for HMOs follows a successful campaign led by the National Residential Landlords Association (NRLA). For some time, the NRLA has been advocating for this change, highlighting the potential savings for tenants and the advantages of simplifying the system. The NRLA estimates that tenants currently paying council tax on individual rooms could save up to £1,000 per year.

Renters in shared housing could save up to £1,000 a year thanks to a campaign by the National Residential Landlords Association (NRLA).

end council tax on HMO

The Government has announced it will reform how council tax is applied to Houses of Multiple Occupation (HMOs).

Currently, some local authorities assess each room in an HMO as a separate unit for council tax purposes and assign them their own band.

This means that tenants of HMOs may have to pay individual council tax bills, which can be higher than the amount charged for the whole property.

Ensuring Equitable Council Tax Treatment for HMOs

The Government wants to provide greater certainty and consistency in the treatment of HMOs for council tax and to ensure that they are banded as one property and have one council tax band.

It also wishes to ensure that liability for council tax remains with the HMO landlord and that their tenants are not subject to individual council tax bills.

end council tax on HMO

The decision follows a consultation launched by the Department for Levelling Up, Housing and Communities (DLUHC) in February, which sought views on the council tax valuation of HMOs.

The consultation was prompted by concerns from landlords and tenants that individual rooms in HMOs have increasingly been assessed as separate units for council tax valuation.

Persistence Pays Off: NRLA’s Advocacy for Fair Council Tax Policies

The NRLA has been campaigning for this change for a long time, arguing that it would save tenants money, simplify administration, and make it easier for renters to budget.

The NRLA estimates that the average HMO tenant currently charged Council Tax on single rooms stands to save up to £1,000 a year.

end council tax on HMO

Ben Beadle, the organisation’s chief executive, said: “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.

“We look forward to the necessary changes being implemented without delay.”

The Government’s Announcement

This is what the Government has announced:

3.2. Amendments to legislation

The government will amend legislation to ensure HMOs are valued as a single property for council tax purposes. This will be achieved through amendments to existing legislation, including the Council Tax (Chargeable Dwellings) Order 1992 and related regulations. These amendments to legislation will apply to all HMOs (including both licensed and unlicensed HMOs).

Share This Article

Are you ready to

Receive exclusive weekly updates directly from us!