Make Landlords of HMOs pay Council Tax or Business Rates

Cllr Shaun McGall recently signed a petition asking the Prime Minister to “Make Landlords of HMOs pay Council Tax or Business Rates.”

The Prime Minister’s Office has responded to that petition and they stated:-

“All property is assessed for taxation on the basis of its primary usage. Where it is used as a person’s permanent residential accommodation it is classed as domestic and subject to the council tax. All other property, apart from certain exempt classes like agricultural premises, is treated as non-domestic and is subject to business rates.
Houses of multiple occupation (HMOs) are treated as domestic property and are subject to council tax. However, it is the owners of HMOs, not the residents, who are liable for council tax. The Government has no plans to make owners of HMOs liable for business rates. To do so would mean treating them differently from other domestic property.
Properties occupied solely by students, regardless of whether it is a HMO or not, are exempt from council tax. This exemption is designed to benefit students, not landlords, because, in general, students are not normally entitled to income related benefits such as housing and council tax benefit.
The distribution of formula grant to local authorities in England takes account of the circumstances of each authority’s area and its relative ability to pay council tax, expressed in terms of the council tax base. The calculation of a council’s tax base does take account of exempt student properties. Other things being equal, the smaller the council tax base of a council’s area, the larger its formula grant. This effect is modified, however, by the application of grant “floors”; that is, a guaranteed minimum percentage increase in grant each year on a like-for-like basis.”

To see the actual petition click here.
Cllr McGall is obviously disappointed with this response from the Labour Government. Communties like Oldfield Park in University towns and cities across the country are being affected by the growth in numbers of HMOs and the associated issues of: bad landlords, unkept gardens and properties, late night noise, increased pressure on parking, poor refuse and recycling management by some tentants and changes in the business and retail mix to cater for this section of society.

The issue isn’t about students but the over concertration of HMOs with a small geographical area. The national planning law on Use Class Orders must be changed to allow local councils to reflect local concerns and set limits on the number of HMOs in a particular street, or geographical area.

Central and local government most act to promote sustainable, balanced communities in which long term residents and tentants in HMOs can live together without street upon street turned over to the buy-to-let market.

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