Cash-starved councils targeting tenants in HMO tax raid, warns big landlord

A government consultation into the way Houses in Multiple Occupation are valued for council tax in England to attract a council tax band for each individual unit has been slammed by landlords as a way for “cash-starved councils to make money off the back of the poorest in society”.

Criticism of the consultation, which ends tomorrow, has been rife because it will be the tenant, not the landlord, that needs to pay the council tax and piles more more financial pressure on those who can least afford it.

SUNAK

And one landlord says this growing practice could be “the Sunak government’s Poll Tax moment if not tackled immediately”.

This could well turn out to be the Sunak government’s Poll Tax moment.”

Kundan Bhaduri, property developer and portfolio landlord at The Kushman Group, says: “Cash-starved councils are trying to make money off the back of the poorest in society.

“HMOs across the country provide essential housing for those on the lowest rung of the rental ladder, so by re-banding individual rooms in HMOs, the Valuation Office Agency, encouraged by local councils, is driving poorer tenants to destitution, as tenants become responsible for paying council tax on their room when this happens.

“With three million people currently living in HMOs in England, this could well turn out to be the Sunak government’s Poll Tax moment if not tackled immediately. It’s nothing short of a disgrace.”

GAUNTLET

Several high-profile MPs are now taking up the gauntlet on this issue, including the Leader of the House of Commons, Penny Mordaunt, and the Conservative MP for Gosport, Caroline Dinenage.

Rob Gill, managing director at Altura Mortgage Finance, says: “The rebranding of HMOs is creating significant extra regulatory and cost burdens for landlords, some of which is inevitably passed onto tenants.

“This move to raise additional council tax will be yet another blow to tenants. The plans need rethinking and a holistic approach applied rather than simply adding more cost and regulation in this piecemeal way.”