In our response to the Welsh Government consultation in November 2024, Propertymark called for Wales to follow England by introducing a single council tax band for HMOs.
Multiple banding can create unnecessary complexity, increase disputes, and make it harder for agents to provide clear advice to landlords and tenants. Clarity over liability is essential for effective tenancy management and financial planning, particularly in a sector already facing increasing regulation and cost pressures.
Propertymark has consistently supported a uniform approach across the UK to reduce confusion and improve consistency for agents operating across borders.
Clearer approach to banding
Under the proposed changes, HMOs will generally be assessed as one property for council tax purposes, rather than being split into multiple individual units.
This addresses long-standing inconsistencies where some HMOs were treated as several separate dwellings, depending on their layout and facilities. That variation has created uncertainty for agents, landlords and tenants, particularly when determining liability and council tax bands.
Propertymark members operating in Wales under the current system have reported that, because Local Authorities have the discretion to define what an HMO is for the purposes of Council Tax, there is variation between different areas, with some contract holders paying high bills and others not paying at all. Therefore, we are pleased to see a clear definition included in these proposals.
Bringing Wales in line with England
The proposals will effectively align Wales with the system already operating in England, where most HMOs are treated as a single dwelling for council tax, and the landlord is liable.
If the proposals go ahead, they will affect licensed and unlicensed HMOs, and property agents will play an important role in ensuring landlords and contract holders understand the new regime.
Importantly, if a property was assessed and disaggregated by the Valuation Office Agency (VOA) before the proposed changes come into force, they will need to apply to the VOA to alter the valuation list.
Owners remain responsible for council tax
A key element of the reform is confirming that the property owner will be liable for council tax, rather than the individual occupants. This removes ambiguity that has arisen in some cases where tenants were treated as liable, particularly where properties were divided into bedsits or units with separate facilities.
For letting agents, this clarification is significant. It reinforces that council tax responsibility should be factored into landlord costs and management arrangements, rather than being passed directly to tenants.
