HMOs And Council Tax: Will I Be Charged Per Bedroom?

May 16, 2023 | Blog | 0 comments

Some HMO landlords in England believe that increasing numbers of properties are now being disaggregated to allow councils to raise more money in tax. If disaggregation occurs, tenants in HMOs must pay council tax individually instead of you paying it in full as their landlord, and although that may sound like an advantage for you, it may not be!

Generally, in a HMO, the landlord takes responsibility for paying council tax. Legally, you cannot assign this responsibility to your tenants, but you can offset the amount by adjusting your rental rates. Some exceptions exist to this rule.

Tenants will normally take responsibility for paying council tax when a HMO:

  • Has been divided into multiple units by the VOA.
  • Is under a joint tenancy agreement.

Problems arise when a HMO is extended or adapted to create extra living units. In such cases, each unit might receive a bill for council tax. Naturally, that’s concerning to any HMO landlord who has a property with many bedrooms since they may be required to pay council tax for each one.

Councils and the VOA are likely to classify HMO living units as being separate dwellings if they have entrances, bathroom facilities, and kitchens that aren’t shared with any other tenants.

Any HMO room that is entirely self-contained will be deemed to be a flat, and this can cause problems of its own. Essentially, all councils have their own requirements and views about what constitutes a separate dwelling, and that leaves grey areas up for debate.

It isn’t difficult to see why HMO landlords in England are facing a dilemma.

On one hand, prospective tenants are keen to enjoy better amenities such as private kitchenettes and ensuite bathrooms. However, the more amenities you include in your HMO bedrooms, the higher the chance of the local authority charging council tax for each room.

Why Is Disaggregation A Problem For HMO Landlords?

When a HMO is disaggregated for the purpose of council tax, it causes a host of issues for landlords, not least of which is the liability to pay several lots of council tax during any void periods. If you end up with prolonged voids, you’ll pay far more in council tax than you would on a HMO that is non-disaggregated. Furthermore, you’ll be competing against non-disaggregated HMOs where the tenants don’t need to pay council tax, and that can lead to difficulties in finding suitable tenants.

Disaggregation And Changes In The Law

Clearly, there is no definitive legislation regarding disaggregation and HMO properties, but the government has now recognised the issues that landlords are facing. Currently, there are proposed amendments which are under consideration that could have a positive impact on HMO landlords nationwide.

The rules as they currently stand are discouraging landlords from making improvements to their properties and could even be disincentivising prospective new landlords from purchasing a property.

One of the proposed changes is that council tax bands will be automatically amalgamated for HMOs, allowing them to be treated as a single property for the purposes of council tax, although any units that have their own kitchens, bathroom facilities, and entrances will still be disaggregated, even under the proposed changes.

Time will tell whether these changes will come to fruition, but until then, it seems that managing HMO properties in England will come with council tax issues as standard.

To simplify the HMO management process, you can depend on the professional team here at The HMO Network. As experts, we’re your number one choice in England for HMO property management.

Get in touch with us today at or on 01245 835859 to find out how we can help you.