HMO Council Tax Advice

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Is your HMO receiving several Council Tax bills?

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Most houses in multiple occupation should now be treated as one property for Council Tax. However, many landlords and tenants are still dealing with separate bands for individual rooms, historic bills or uncertainty over who is responsible for payment. We review the property, its occupation and the existing Council Tax assessments before advising what should happen. Where the Council Tax list appears to be wrong, we can prepare the evidence and deal directly with the Valuation Office Agency and the local council. ​You will deal directly with Steve Adams or Mark Allen throughout your case.

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Request a free initial review

Send us the property address, the latest Council Tax bills and a brief description of how the accommodation is arranged. We will review the initial information and explain whether the assessments appear to be correct.

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What is an HMO for Council Tax purposes?

The Council Tax definition of an HMO is not necessarily the same as the definition used for property licensing.

For Council Tax purposes, an HMO is generally a property rented to people who form more than one household and who share some or all of the facilities. Depending on the property, this could include:

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• A shared house rented by the room

• Student accommodation within a converted house

• Bedsits with shared kitchens or bathrooms

• A house occupied under separate tenancy agreements

• A property containing a mixture of private rooms and shared facilities

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Whether a property needs an HMO licence does not, by itself, determine how it should be assessed for Council Tax. The Valuation Office will consider the physical layout and how the accommodation is actually occupied.

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Should an HMO have one Council Tax band?

Most HMOs are now valued as one property rather than having an individual Council Tax band for every room.

This has applied to most HMOs in England since 1 December 2023 and in Wales since 3 June 2026. Where an HMO still has separate assessments for individual rooms, it may be possible to ask the Valuation Office Agency to remove those entries and create one assessment for the property. A single assessment is not automatic in every case. Parts of a building that are genuinely self-contained may still require separate Council Tax bands. When might part of an HMO remain separately assessed? Separate bands may still be appropriate where accommodation has been constructed or adapted for use as an independent home. 

The Valuation Office may consider whether an area has:

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• Its own kitchen or permanent cooking facilities

• A private bathroom or shower room

• Its own toilet and washing facilities

• A clearly defined living and sleeping area

• Separate access

• The ability to be occupied independently from the rest of the building

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No single feature decides the matter. A lock on a bedroom door, a separate tenancy agreement or a small cooking appliance will not necessarily make the room a separate dwelling. The whole arrangement needs to be examined, including the layout, facilities and practical use of the accommodation.

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Who is responsible for the Council Tax?

In England, the owner or landlord is generally responsible for Council Tax where the property falls within the relevant HMO liability rules. This can apply even where the tenancy agreements state that tenants must contribute towards the Council Tax. Such a clause may allow the landlord to recover the cost from the tenants, but it does not necessarily change who the council can hold legally responsible. The position in Wales should be checked against the applicable Welsh liability rules and the individual occupation arrangements.

Problems can arise where:

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• Tenants have received separate bills for their rooms

• A landlord receives a backdated bill after individual bands are removed

• Former tenants are still shown as liable

• The council has not updated its accounts following a Valuation Office decision

• The liability dates do not match the actual occupation

• Exemptions or discounts have not been applied correctly

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The Valuation Office decides how the property appears in the Council Tax list. The local council separately decides who is liable and how much must be paid. Both records may need to be corrected.

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What happens to existing room assessments?

If the Valuation Office agrees that the property should be treated as one HMO, it will normally remove the individual room assessments and enter a single Council Tax band for the property.

The local council should then close or amend the old accounts and create the appropriate account for the combined property.

This can result in:

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• Existing room bills being cancelled or recalculated

• Credits or refunds for tenants

• A new or revised bill for the landlord

• Backdated liability

• Changes to discounts or exemptions

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A change to the Council Tax list does not guarantee an overall reduction. It is important to consider the likely consequences before asking for the assessments to be altered.

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Can a Council Tax change be backdated?

The effective date depends on why the list is being changed and when the relevant circumstances arose. Where rooms were incorrectly assessed separately, the Valuation Office will decide the date from which the entries should be removed or altered. The council will then recalculate the accounts from that date. Backdating can produce substantial credits, but it can also create a new liability for the owner. We examine the possible outcome before recommending that a case proceeds.

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HMO licensing and Council Tax are separate matters

A property can be an HMO for Council Tax without requiring a mandatory HMO licence. Equally, the fact that a property is licensed does not automatically settle whether it should have one Council Tax band or several. The licensing authority considers matters such as occupancy, safety and property management. The Valuation Office considers whether the accommodation forms one dwelling or contains separate units for Council Tax purposes. Information provided for licensing should still be consistent with the evidence submitted to the Valuation Office.

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What evidence will be needed?

The evidence depends on the property, but it will commonly include:

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• The current Council Tax bills

• The full property address

• Floor plans showing every room and shared area

• Details of kitchens, bathrooms and toilets

• Internal and external photographs

• Copies of tenancy or licence agreements

• The name of each occupier

• The dates each occupation began and ended

• Details of locks, entrances and access arrangements

• HMO licensing documents where relevant

• Previous correspondence with the council or Valuation Office

• Evidence showing how the accommodation is used in practice

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Clear plans and photographs are particularly helpful. They allow the Valuation Office to understand which facilities are private, which are shared and whether any part of the building can function independently.

 

How we can help

Our HMO Council Tax service can include:

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• Checking the existing Council Tax assessments

• Reviewing the physical layout and facilities

• Identifying whether any accommodation is genuinely self-contained

• Examining tenancy agreements and occupation dates

• Considering who may be liable for the Council Tax

• Reviewing the possible effect of backdating

• Preparing the necessary plans and supporting evidence

• Submitting the appropriate proposal to the Valuation Office

• Responding to further enquiries

• Checking the resulting Council Tax list alterations

• Reviewing the council’s revised accounts

• Advising on the next step if the requested change is refused

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We will explain any risks before recommending that an application is made.

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Why choose Business Rate Advisors Ltd?

You will deal directly with Steve Adams or Mark Allen rather than being passed between different departments.

We consider both sides of the case: how the property should appear in the Council Tax list and what the alteration may mean for the landlord and tenants. Our advice is based on the actual layout and occupation of the property, supported by plans, photographs and documentation.

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Request your free HMO Council Tax review

Please send us:

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• The latest Council Tax bills

• The full property address

• A basic floor plan

• Details of the facilities in each room

• Copies of the tenancy agreements

• Recent photographs

• Any correspondence from the council or Valuation Office

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We will review the information and explain whether the property appears to be correctly assessed.

Call Steve Adams: 07415 048643
Call Mark Allen: 07376443943
Office: 01225667747
Or use the contact form below to request a free initial review.