Confusion over the status of discount and exemptions in a Council Tax House in Multiple Occupation (HMO) is very common and often leads to a chance to reduce your Council Tax charge being missed.
What defines a Council Tax HMO ?
The Council Tax (Liability for Owners) Regulations 1992 (as amended) is the legislation which supplies the definition of a HMO for Council Tax purposes (which confusingly is different to definitions used for other purposes). The full definition can be found here and should not be confused with the definition which is used for Local Authority licensing purposes.
Section 8 of the Local Government Finance Act 1992 mandates that the liable person for the Council Tax charge is the ‘owner’ (the definition of owner is defined in legislation) – this means that the occupiers are not personally responsible for the Council Tax payments. In general terms, if there isn’t a single rental on the whole property, the landlord will be responsible for the Council Tax charge on the HMO.
Council Tax discounts and exemptions
What many owners don’t realise is that the standard Council Tax discounts and exemptions will also apply to a HMO and should therefore be claimed where the criteria is met.
In respect of a Council Tax discount or exemption the initial onus is on the Local Authority to determine eligibility to any discounts before issuing a demand notice for payment – if they don’t have the relevant information then they will not award any reduction so it is important to keep them updated.
It can be difficult to get information from the occupiers however you should make sure that where possible you find out their status – full-time student, apprentice etc – and pass the details to the local authority so that they can make a determination in a timely manner. Remember that a property with one occupier can still be a HMO and in these cases a 25% Council Tax discount, at least, would be applicable.
Advice & Assistance from LGFA92
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Contact us today. Email us at [email protected], Call our Council Tax helpline on 0191 6451118.
This article is solely the view of LGFA92, the Council Tax experts, based on our interpretation of legislation. Your local authority is free to dispute this view. A binding decision may require the intervention of a valuation tribunal.