Council tax per room for HMO in Nottingham!

Council tax per room for HMO in Nottingham!

10:36 AM, 12th February 2021, About 4 years ago 43

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Hello all, I wanted to make fellow landlords and agents aware of a situation we are facing in Long Eaton, Nottingham. A recent ruling by the Valuations Office has ruled that a newly converted building providing 8 luxury ensuite bedrooms (HMO) is to be classed as separate dwellings and each tenant will be liable for council tax. The VAO is saying that because there is an ensuite and a lock on the door it is a “dwelling”. All the other facilities are shared in the house.

This newly converted, beautiful HMO has now had the rug pulled from under its feet. We have had to communicate to all tenants that the council will be pursuing them for Council Tax. We manage an HMO in the same area with 8 ensuite bedrooms, the same setup and there is only 1 Council Tax. It means this property is now not on a level playing field compared to its competitors. It is madness. So the once affordable ensuite bedrooms have suddenly become unaffordable and uncompetitive as each tenant is looking at a council tax bill of around £100 a month after the single person discount has been applied.

I find this ruling completely wrong and more importantly a devastating ruling for single people – young people trying to gain independence, saving for the first home, marriage breakdown, so many reasons why people need, good quality, affordable shared housing.

The landlords are trying to campaign the Valuations office to demonstrate that they are being unfairly treated. The council say it is nothing to do with them as it is the Valuations Office that decides. Looking at the comparables in terms of local HMOs, none have had their rooms classed as “dwellings”. Only bedsits are classed as “dwellings” and that I understand.

I’m an agent and a landlord. We have multiple HMOs. This ruling sends a shiver down my spine for the future of HMOs.

Does anyone have any experience of this?
Many thanks.

Amanda


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Harry Chunk

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10:52 AM, 12th February 2021, About 4 years ago

Remove all the locks and supply the tenants with a hasp and staple, not the quality you want to achieve but stuffs the council.
Put a safe in each room for valuables. Sorry a bit of a case of thinking outside the box I fear.

Paul Shears

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10:55 AM, 12th February 2021, About 4 years ago

Reply to the comment left by Harry Chunk at 12/02/2021 - 10:52
Could delay the inevitable for a bit. 🙂

MargaretM

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10:57 AM, 12th February 2021, About 4 years ago

Surely there is a right of appeal to the Valuation Office as they have made a decision contrary to your license for HMO. If these rooms are now dwellings you have a block of flats and therefore none of the requirements of HMO would therefore apply surely?
You should be able to find what the criteria are for deciding a category for valuation purposes.
Have a look at this about appeals
https://www.valuationtribunal.gov.uk/forms/appeal-forms/council-tax-liability-2/
Margaret

brian gill

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10:58 AM, 12th February 2021, About 4 years ago

We had the same issue about 10-12 years ago, and ended up in court! My comments are from experience and have no qualification.

As you have no kitchen facilities behind the bedroom door, I would not think the units can be classed as self contained as they do not provide the 'three basic amenities'. The three amenities being toilet, personal washing facilities and cooking facilities. The definitions are very long winded but if you google Section 254 Housing Act 2004 this covers the definitions the council will work to, although the VO may have there own version.

MargaretM

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11:03 AM, 12th February 2021, About 4 years ago

Have a read of this from https://www.gov.uk/guidance/understand-how-council-tax-bands-are-assessed#banding-of-houses-in-multiple-occupation

Banding of houses in multiple occupation
Domestic properties that have separate dwellings are known as houses in multiple occupation (HMOs). Each separately let part of a property qualifies as a separate dwelling with its own band. There may be circumstances where the VOA can combine the bands.

Examples
HMOs with little or no adaptation: Where minor adaptations have been added then the VOA can put the whole property into one band. This could be where door locks are added and the occupants of the separately let parts share the kitchen and bathroom of the original house.

HMOs with adaptations to each floor: A single band can be given where each floor of a house let in parts has standard facilities and can be treated as a self-contained unit. This applies where the occupiers of the floor share a kitchen and a bathroom.

HMOs with adapted letting rooms: Separately let rooms in a HMO may have been adapted, for example, so that they have their own kitchenette or separate shower/bath and WC. They will be given their own band even though may share some facilities. In making a decision, the VOA will look at the degree to which each part has been structurally altered.

Purpose built HMOs: These properties would generally not be combined and would have separate assessments for each internal unit.

There’s more information available in practice note 6: premises in multiple occupation.

Your local authority calculates a separate Council Tax bill for every property banded and collects payments. The council is responsible for applying relevant discounts or exemptions.

If you believe your band is wrong, or your household shouldn’t be banded at all, you may be eligible to appeal.

Harry Chunk

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11:12 AM, 12th February 2021, About 4 years ago

Reply to the comment left by Harry Chunk at 12/02/2021 - 10:52
The appeals process against the ruling by the VO is heard by lay people effectively ordinary people with nothing else to do in life. They do however listen to reasoned arguments and they will listen to your case in plain English. I did win an appeal once for a friend of mine who I accompanied as "prisoners friend", a case of getting the panel on side. It is a buildings or dwellings tax and not a poll tax so not all parts of the building are habitable without access to the common areas.

Alistair Cooper

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11:21 AM, 12th February 2021, About 4 years ago

Margaret is quite correct. If there are any private facilities (en suite or cooking facilities ; doesn’t need to be both ) chances are the VOA will value as X x Band A’s
The only ‘trick’ is to keep away from the VOA as long as you can. As soon as there is an opportunity for them to revalue there is a very strong likelihood they will reband as multiple Band As
To my knowledge most (if not all) appeals have lost to date
Eventually the market will readjust and rents will settle once everyone is on a level playing field (ie all tenants are paying their own) but this could take a decade or more
Sadly until then this particularly unfair tax that is not based on ability to pay will remain a burden and just another of the cumulative and spiteful govt attack on all of us that are proud of the quality & Safe accommodation we offer
Sadly the over onerous legislation, absurd levels of being watched, being kept in fear of constant huge fines ‘imposed’ by mainly unqualified council officials who have no interest in justice, combined with the relentless tax raid on private sector landlords will drive more people away from the market.
This may end up being good for those of us that survive as it will inevitably drive up rents but will leave many with no where to live!

Alistair Cooper

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11:27 AM, 12th February 2021, About 4 years ago

I wouldn’t take Harry’s advice .... removing locks & fitting hasps & staples could be a criminal offence .... all fire doors in HMOs must be able to be opened from the inside without resort to a key so the tenant in this scenario would not be able to lock their door from the inside
The lock in itself will not sway the VOA determination ... it’s the element of private facilities that determines wether each room can be defined as a ‘dwelling’

TheMaluka

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11:52 AM, 12th February 2021, About 4 years ago

It's not only in Nottingham, this is happening across the country. Never mind you can reduce the rent to compensate for the increased council tax !!! 😡

Earlsdon

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12:04 PM, 12th February 2021, About 4 years ago

I recall reading some time ago a similar issue (perhaps on this site). An option is to let on a joint basis to the group of tenants and not on a room by room basis. Let the tenants decide themselves which rooms they occupy. Further evidence that they swap rooms (by mutual consent) during the tenancy may assist in proving that the property is one dwelling. I don't know what type of tenants you have so this may not be feasible.

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