Welsh Government launches HMO council tax consultation
The Welsh Government has proposed changes to Council Tax for houses in multiple occupation (HMOs) in Wales. Read about the plans and find out how to contribute to our response.
As demand for private rented homes continues to surge across Wales, affordable and flexible housing options, like houses in multiple occupation (HMOs) are becoming increasingly popular. HMOs offer a cost-effective solution for many tenants (or contract holders, as they are now known in Wales), but some have found themselves paying considerable Council Tax bills due to the practice of ‘disaggregation’.
Currently, some HMOs are ‘disaggregated’ for Council Tax purposes, meaning each room in an HMO is banded and charged separately, leaving some occupants paying more Council Tax than others in similar ‘aggregated’ properties on the same street. This has resulted in a complex and inconsistent tax base, and – following recent changes in England, where reforms have already ensured that HMOs are billed as single properties – a disparity between England and Wales.
Recognising the need for change, the Welsh Government has now proposed to simplify the system.
The plans will ensure that HMOs receive a single, aggregated Council Tax bill, rather than individual bills for each room, helping to “create consistency across the sector, and provide certainty for councils, owners and households”.
Under the changes, landlords will be responsible for paying the single Council Tax bill, which they can then apportion to each unit if necessary. For occupants, this will avoid the confusion and potential additional financial burden of separate bills.
HMOs inhabited entirely by full-time students will remain exempt from Council Tax, subject to an application for exemption by the landlord. However, the changes will not be applied retrospectively, and landlords of disaggregated properties will need to apply to the Valuation Office Agency (VOA) to alter the valuation list.
The Welsh Government is seeking feedback on the proposals. If you have comments or concerns and would like to contribute to our response, please email [email protected] by 1 November 2024.
This is a crucial opportunity to help shape policy and practice in the Welsh private rented sector – don’t miss your chance to contribute.
