An agent’s organisation has slated the current state of local authorities’ policies on charging council tax on HMOs as a mess without any consistency whatsoever across the country.

The organisation says the so-called system is a “postcode lottery”.

The agent’s body response to the government’s consultation on the system, says: “There appears to be a national postcode lottery on whether or not an HMO will be aggregated for council tax purposes. We have seen evidence from our members that HMOs are generally aggregated in areas across the country such as Cornwall, Leicester and Leeds, yet in Somerset HMOs are banded by room. The discrepancy is concerning as a lack of consistency across the country leads to confusion and a mismatch in costs to tenants, who are penalised if the council tax is not aggregated.

“Larger HMOs, which are subject to licencing schemes, are more likely to be identified and, therefore, more likely to be reassessed as separate units. Councils can generally only identify HMOs that have licenses, those with five beds or more, or in areas with selective or additional licencing schemes.

“Therefore, properties with less than five bedrooms will be less likely to be picked up as an HMO by local authorities. The Valuation Office Agency will only reband a property which has been flagged as potential individual units, it is possible that in an area where many HMOs are banded by room, only the larger properties will be affected.”

The comments were part of the organisation’s formal response to the consultation which has now closed.

The agent’s organisation says the government must consider changing the Council Tax (Chargeable Dwellings) Order 1992, to stand any chance of putting a stop to the inconsistency.

Changes should include amending article 4 of the order so council’s listing officers would have to class HMOs as single properties and the Valuation Office Agency (VOA) combining council tax bands for HMOs.

HMOs would now be classed as one property with one council tax band with a few exceptions such as if an HMO has self-contained accommodation.

The government issued the consultation following the constant lobbying by trade bodies of the Department for Levelling Up, Housing and Communities.

All homes, including HMOs, come under  a council tax band awarded by the VOA which determines how much council tax is to be paid on factors including location and number of bedrooms.