A controversial system which has seen council tax bills soar for some HMO landlords, is set to be ended following pressure from the NRLA. ‘Disaggregation’ as it is known, is the process by which the Valuation Office Agency (VOA) splits an HMO into single units for council tax purposes. This means landlords are liable to pay council tax per room, rather than for their property as a whole.
Understandably, this can add thousands to the council tax bill, rendering the HMO potentially lossmaking and meaning that rents have to be increased substantially to cover costs, hitting tenants in the pocket.
Now, following talks with the NRLA and pressure group HMO Council Tax Reform Group, the Government has announced plans to end this unfair practice.
Historically the VOA has wide ranging discretion as to how disaggregation was applied. Rooms have not even had to have self-contained washing or cooking facilities to be disaggregated. There is no process to appeal a decision, even though an identical property in a neighbouring local authority may not be subject to the same rules.
The NRLA has been campaigning against this unfair practice for some time, writing to the Law Commission and the Government and highlighting the issue in evidence submissions. With the recent government announcement, this work appears to have been successful. The practice of disaggregation has not officially ended yet though, so we will monitor the situation and update you when we hear more.
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