Welsh Government Proposes New Council Tax for HMOs

The Welsh government wants to change the method for charging council tax on houses in multiple occupation (HMOs).

Instead of issuing bills for each room in an HMO, the government wants to issue one bill covering the entire property and to make the owner responsible for paying the bill.

Ministers also want to introduce a standard definition of an HMO for Wales that is consistent across legislation.

The proposed definition is:

A building, or part of a building, is an HMO if it satisfies:

• the standard test
• the self-contained flat test
• the converted building test
• if an HMO declaration is in force under Section 255 of the Housing Act 2004
• it is a converted block of flats to which Section 257 applies

Explanations of the tests and declarations are included in the consultation papers.

Ministers ask for landlord views

Details of the changes and what they mean to landlords and renters are in a consultation document titled The Valuation Of Houses In Multiple Occupation (HMOs) For Council Tax published today (04/09/2024).

The consultation is open until November 26, 2024.

The document poses several questions, including:

• Do you agree HMOs should be treated as a single property for council tax?
• Do you agree with the proposed definition of an HMO?
• Should other properties be included in the definition?

“The proposed changes would ensure that HMOs will be valued as a single property where appropriate, creating consistency across the sector and providing certainty for councils, owners and households,” says the document.

“This would ease administrative burdens on councils and ensure the council tax liability will remain with the owner in the usual way, rather than councils billing individual occupants who may only occupy the property for a short period.”

Similar Implementation in England

A similar change replicating the proposals has already been introduced in England, and at first glance, the outcome will be substantially the same. Read more about the England changes here.