Propertymark calls for council tax reforms

A leading industry body has called on the government to change council tax housing banding for HMOs.

Propertymark has submitted a response to the Department for Levelling Up, Housing and Communities’ consultation arguing that HMOs should be banded as one property under one council tax band, rather than the individual rooms.

The current system allows some HMOs to be banded for council tax purposes per room, meaning that some tenants will be liable for council tax on a room in a shared house.

‘Adopting a council tax room by room is not fair’

The new proposals would require local authorities to band an HMO as one property, with the landlord liable for council tax.

Propertymark believes there needs to be consistency in the message the government is sending, to ensure all councils apply the same rules.

Sophie Lang, Propertymark’s regional executive, said: “In Cornwall, the council doesn’t tax rooms separately, but in Somerset they do. Adopting a council tax room by room is not fair, and will increase costs for landlords and tenants, leading to higher rents.

“HMOs are 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.”

Loss of 500,000 homes from the PRS since 2018

Propertymark believes the government needs to ensure landlords and tenants aren’t paying inflated fees, and more housing needs to be built.

The organisation’s president-elect, Greg Tsuman, said: “We need to build more homes, not carve them up into smaller and smaller units.

“The pressure on landlords from multiple directions is well documented and has already resulted in a loss of 500,000 homes from the private rented market since 2018 (English Housing Survey).”

He added: “Increasing overheads for landlords of HMO properties further, by charging more council tax on top of the license fees they are already paying, will add more to that pressure and will do nothing for the most vulnerable tenants who will have to pay for the rises through higher rent.

“The reality is that higher council tax costs will directly impact the tenants who are already struggling and having to share facilities as a result of rising rents.”

Propertymark’s head of policy and campaigns, Timothy Douglas, said: “We are supportive of the government’s objective to deliver consistency of outcomes in HMO banding assessments.

“Agents and their landlords, tenants, and local authorities will benefit from having one cumulated council tax band for an entire property.”

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