2nd
Mar 2022
HMO landlords could soon be facing an HMRC revaluation of their properties with predicted tax rises as much as 300 per cent.
The Daily Telegraph’s recent investigation found that HMRC intends to focus its new tax revaluation to areas with high numbers of HMOs.
However Trade minister Penny Mordaunt is highly critical of the Revenue’s revaluations and is urging the government to get involved and take to task the HMRC’s scheme.
She told the Telegraph: "This is a growing problem and it is arbitrary. It is stopping homes being built because developers' business models become unviable.”
The British Property Federation’s Ian Fletcher, adds: "Local authority budgets have been squeezed for more than a decade, so they need ways of getting more money. There is only one way this will go and that is up”.
The article also mentions that many HMO landlords pay council tax and other costs for their tenants who are charged an all-inclusive monthly ‘rent’.
The new valuation’s fees will only end up in the ‘lap’ of tenants who will face an increased monthly rent because of the ‘hiked’ council tax. However landlords will be responsible for paying the increased tax with many calling the new valuation as another ‘stealth tax’.
The newspaper spoke to Daryl Brewer a Portsmouth landlord, who says the current situation is “an absolute mess” ; currently the city is in the top 20 local authorities in England for HMO housing.
The Valuation Office contacted Brewer and stated his six-bedroomed property let out to six tenants has now been categorised as six separate dwellings.
The unfortunate landlord has seen his council tax rise four times higher than the original £1,821 which has now shot up to £7,287.
A spokesman for the Valuation Office, which is part of HMRC, tells the Telegraph: “The amount of tax any assessment will yield is not a consideration.”
Richard Merrick of PIMS,said: “ Reassuring to hear from HMRC that extra money from an outright ‘stealth tax’ yield is a not a consideration, obviously this goes alongside its laissez-faire attitude to retrieving the £4bn Covid 19 fund scamming and badly spent mistakes which may not be a consideration as well ?”
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