Council Tax and houses in multiple occupation (HMOs)
If you have a property which is classed as a house in multiple occupation (HMO), then this may affect the way that you pay Council Tax.
Rules on Council Tax for HMOs
For Council Tax purposes, a HMO is considered a property that was originally built, or later adapted for more than one household to live in.
It can also be a property where 1 or more people live, but they either:
- only have written or verbal permission to live in part of the property
- have written or verbal permission to live in the whole property, but are not responsible for paying rent or a licence fee for it
A property can become a HMO or stop being one depending on the rules in the rental agreement.
For example, if 2 people jointly rent a property for £1000 a month, both of them are responsible for paying Council Tax.
However, if the property is later rented to 2 people who each pay £500 a month, but only have rights to live in some parts of the property, then it becomes a HMO. So then it will be the property owner’s responsibility to pay Council Tax.
Is a property still a HMO if someone moves out?
Even if 1 person moves out of the property and the other keeps paying £500 a month in rent, the property is still considered a HMO.
How we classify HMOs for Council Tax
Sometimes it is difficult for us to figure out if a property is a HMO or not. The rental agreements might not match, or we might need more information from tenants or landlords.
In these cases, way may need to ask you for further information, such as proof of rent paid, and contact other parties such as tenants.
Paying Council Tax on self-contained flats
Some properties which we call HMOs are made up of flats. These flats will often have their own cooking, washing and toilet facilities.
Self-contained flats are seen by the Valuation Office Agency (VOA) as individual properties in their own right. This means that each flat will get its own entry in the valuation list we use to figure out taxes. We will send a separate Council Tax bill to each person living in these flats.
If the VOA finds that the landlord has added extra facilities to their property, they may treat it as a separate home for tax purposes. This means that if some flats become empty in a building, the landlord will get a Council Tax bill for each empty flat.
If a tenancy is abandoned
If a tenant moves out of a property but they still have 6 months or more left on their tenancy, they are liable to pay the Council Tax until the tenancy ends. This is unless the owner does something like:
- change the locks
- move into the property themselves
- rent it to someone else
- provide written confirmation to terminate the tenancy early
Guidance for letting agents
Letting agents (whether a company or sole trader) managing a HMO on behalf of a landlord are not liable to pay Council Tax on it. This is unless they have a lease or tenancy agreement with the landlord to sublet the property to the tenants. The agents will then assume the role of the landlord or owner and be liable for paying Council Tax for the HMO.
More information on HMOs
If you want to find more information about HMOs and how to licence them, visit our houses in multiple occupation pages.
Page last updated: 24 January 2024