The valuation of houses in multiple occupation (HMOs) for Council Tax: summary of responses

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For further information:

LGFR Division
Welsh Government
Cathays Park
Cardiff
CF10 3NQ

Email: CTandNDR.Consultations@gov.wales

Houses in Multiple Occupation (HMO) properties in Wales have historically been valued and banded for council tax purposes as aggregated properties, meaning they are usually banded as a single property with 1 council tax band, and the property owner liable for council tax rather than the occupier. 

However, in recent years and due to greater diversification in property types for HMOs, the Welsh Government is aware of some cases across Wales and England where HMOs have been valued on a disaggregated basis, meaning each individual unit of occupation within the property is assessed and given a council tax band, with each occupier of a HMO liable to pay council tax.

The Welsh Government’s consultation set out a policy intention to amend legislation to restore the longstanding policy approach to council tax for HMOs, due to the adverse impact disaggregation can create for both owners and occupiers. To provide greater certainty and consistency in the way that HMOs are treated for council tax in Wales, the Welsh Government invited views on proposals to introduce changes:

• to clarify that HMOs should continue to be banded as a single property with 1 council tax band
• that council tax liability for HMOs continues to rest with the HMO owner/landlord rather than the occupier

The consultation contained questions about the treatment and definition of HMOs for council tax purposes, if other types of HMOs should be aggregated and if there are other types of properties that should be defined as HMOs and aggregated.

The consultation proposed 2 draft statutory instruments to bring into effect the policy proposals:

• the Council Tax (Chargeable Dwellings) (Wales) Regulations 2025 (‘the Chargeable Dwellings Regulations’) to replace the Council Tax (Chargeable Dwellings) Order 1992 (‘the 1992 Order’)
• the Council Tax (Liability for Owners) (Wales) Regulations 2025 (‘the Liability for Owners Regulations’) to replace the Council Tax (Liability for Owners) Regulations 1992 (‘the 1992 Regulations’)

The proposed changes in Wales follow changes made in England in 2023 through the Council Tax (Chargeable Dwellings and Liability for Owners) (Amendment) (England) Regulations 2023.

Views were invited as part of a 12-week consultation which began on 4 September 2024 and ended on 26 November 2024. The consultation was published on the consultation pages of the Welsh Government’s website. Respondents were able to submit their views and comments in Welsh or English, by post, by email or through an online response form. The link to the consultation was emailed to a wide range of stakeholders.

All the responses have been considered and analysed and this report aims to present the broad views and themes that were provided in responses to the consultation.

The consultation applied to Wales only.

The consultation received a total of 103 responses. 

Question 1

Who responded to the consultation?

Where respondents did not provide the name of an organisation, it is assumed that they responded in a personal capacity and are categorised as a member of the public.

A list of respondents other than those who requested anonymity is at annex a. Where respondents asked for their details to be withheld, they are identified as ‘Anonymous’.

Question 2

Do you agree with the Welsh Government’s policy to provide a consistent approach for the treatment of HMOs for council tax purposes, ensuring HMOs are aggregated and treated as a single dwelling?

The question provided a yes or no option and an opportunity to provide written comments. The choice of respondents to the yes or no answer was relatively mixed, with 43% opting for yes, 54% opting for no and 3% did not give a preference. Those who answered yes provided comments expressing support for the Welsh Government’s proposal to implement a consistent approach for the treatment of HMOs for council tax purposes, ensuring HMOs are aggregated and treated as a single dwelling.

Local authorities and the Welsh Local Government Association (WLGA) welcomed the consistency this approach would bring to the valuation of HMOs. A number of professional and representative bodies such as the National Residential Landlords Association and Propertymark also welcomed the proposals. Comments from respondents suggested that a single aggregated council tax bill would help to reduce complexity of the council tax system for landlords and tenants. One HMO landlord highlighted the fairness of all HMOs valued as a single dwelling with one council tax band.

Feedback from some property owners and landlords to this question was more mixed, with some expressing opposition to the policy intention. Many of the concerns expressed in written comments however appeared to stem from a misunderstanding of the proposed changes. Comments suggested readers thought the proposals to restore aggregation of HMOs would affect landlords generally of all properties, becoming liable for council tax themselves leading to higher costs and administrative burdens. However, the consultation proposals sought to maintain the existing and longstanding treatment of HMOs in the council tax system. 

A number of additional comments were also received about the council tax system more generally but these were outside of the scope of the consultation.

Question 3

Do you agree with the proposed definition of HMOs for council tax purposes as set out in the draft Regulations?

Similarly to question 1, a higher proportion of respondents (57%) did not agree with the proposed definition of HMOs as outlined in the consultation, and the attached draft Chargeable Dwellings Regulations 2025 and the draft Liability for Owners Regulations 2025. However, no alternative definitions were proposed. The majority of respondents to this question either reiterated earlier points made or submitted comments that were outside the scope of this consultation. 

Many respondents (35%) including owners and landlords, local authorities and sector representatives expressed support for the definition set out in the draft regulations. The WLGA welcomed consistency and transparency for ratepayers. The National Landlord Association stated the definition would reduce ambiguity. Propertymark welcome the inclusion of a clear definition to ensure a consistent approach.

A small number of respondents (4%) agreed with the policy intention to exclude converted blocks of flats from the definition of an HMO.

One suggestion to amend paragraph 2 of the standard test for HMOs was noted, however this is defined in the Housing Act 2004 and is therefore beyond the scope of this consultation. 

Question 4 and 5

Are there other types of properties not included in the definition for HMOs in the draft Regulations which should be aggregated and treated as a single dwelling for the purposes of council tax valuation and banding?

Are there any other types of properties not currently defined that could be considered to be treated as a single dwelling for the purposes of council tax valuation and banding?

Respondents to this question did not identify any additional property types that should be included within the definition of HMOs set out in the draft Regulations. Similarly, no other types of properties beyond those already defined were proposed for aggregation to be treated as a single dwelling for the purposes of council tax valuation and banding. 

Question 6

Do you have any other comments on the proposals?

Many respondents chose not to answer this question, or their comments were outside the scope of the consultation. Among those who did respond, some reiterated their support for the proposed approach in earlier questions, whilst others repeated earlier concerns. No new points were raised in response to this question.

Welsh Language questions 7 and 8

The Welsh Government would like your views on the possible effects that the proposals for HMOs could have on the Welsh language, specifically on:

• opportunities for people to use Welsh
• on treating the Welsh language no less favourably than English

Please also explain how you think the proposals for HMOs could be developed so as to have:

1. positive effects or increased positive effects on opportunities for people to use the Welsh language and on treating the Welsh language no less favourably than the English language
2. no adverse effects on opportunities for people to use the Welsh language and on treating the Welsh language no less favourably than the English language

A large number of respondents did not provide an answer to these questions (67%). Of those who provided an answer, some respondents were unsure of the impacts of the proposed policy on the Welsh language, and some did not believe there would be any impact on the Welsh language. 

The Welsh Government is committed to making changes which restore the longstanding approach to the valuation of HMOs in Wales as a single property for the purposes of council tax, and to ensure those rules are aligned with those in England. An update on the development of this work will be published in due course.

• AGMW Property Ltd
• Caerphilly County Borough Council
• Kingsway Upholsterers and Furnishers
• Mr Julian and Mrs Kay Keogh Building Account
• National Residential Landlords Association
• Peace of mind properties
• Propertymark
• Sherbrook Associates Ltd
• Tain Investments Ltd
• Training for Professionals
• Varcity Living Limited
• Welsh Local Government Association
• 25 responses were received from private individuals
• 66 respondents requested to remain anonymous