England Landlord Guidance

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1.9.2 Council Tax HMO

If there is more than one tenancy agreement for the property (e.g. if it is divided into bedsits), the property will be known as a HMO but this should not be confused with the HMO rules landlords are more commonly familiar with (for which see later). Council Tax has separate and entirely different definitions for what is a HMO for Council Tax purposes.

Where the property is regarded as a HMO (for Council Tax purposes) the rules are more complex and will vary depending upon the policy of the council in that area and the layout of the property. Traditionally in a bedsit type property the landlord was responsible for payment of Council Tax and collected this through the rent charged to tenants. Valuation Tribunal rulings have stated that the liability for Council Tax depends upon the location and number of kitchens and not whether it is self-contained. A bedsit with its own kitchen, but sharing a bathroom and WC, may still be rated as an individual unit for Council Tax purposes making the tenant liable for the Council Tax. Whereas a bedsit with an ensuite bathroom, but sharing a kitchen, the liability would lie with the landlord. A bedsit type house with two shared kitchens may be rated for Council Tax purposes as two separate units, three kitchens – three units etc. Some councils still take the traditional view, but more areas are issuing Council Tax demands based on the availability of kitchens and it is important to seek advice from the local Council Tax team.

A property can also be regarded as a HMO for Council Tax purposes even if only ‘part of the building’ is let. For example if a conservatory or loft is excluded from the tenancy. It is also possible for a property to be regarded as a HMO where the dwelling was originally constructed or subsequently adapted for occupation by persons who do not constitute a single household. Therefore, it is even possible that adaptations alone define the property as a HMO for Council Tax. Whether these situations would be defined as a HMO will depend on the individual circumstances.

Where the property is a regarded as a HMO (for Council Tax purposes) the landlord will always be liable to pay the Council Tax.