People living in multiple occupancy homes (HMOs) have been hit with “rip off” council tax bills dating back three years after previously being exempt from the charge. The move by the Valuation office Agency (VOA) has led Tory MP Dame Caroline Dinenage to table an ammendment to the milestone Levelling Up Bill this week amid fears that the sudden change of policy will hit communities which are trying to regenerate as well as the pockets of people who cannot afford more tax. The Bill is being taken through parliament by Levelling Up Secretary Michael Gove.
Previously, with houses of multiple occupancy, the residents were exempt from counncil tax with the landlord paying a single charge for the entire property. But there are now localised examples of the VOA now sending band A council tax bills (the lowest level), to all the different residents has indicated a massive shift in the rules.
The move has come as people have been struggling with the cost of living crisis, rising rents, a hike in the cost of food and energy and last week a series of new tax rises by Chancellor Jeremy Hunt in his Autumn Statement.
But the council tax bill for HMO occupants is also seen as another assault on the pockets of generation rent, a group which dominates voters below the age of 45 and where the Tories have lost massive amounts of support in recent years.
Dame Caroline fears that the change in the rules will also be used to fiddle housing figures in the area by classifying different rooms in HMOs as separate dwellings and will hold back attempts at levelling up in many communities including her own seat, Gosport.
Dame Caroline said: “I worry that this is a sneaky way of fiddling the housing numbers. The rip-off VOA are hitting residents with unexpected council tax bills, sometimes backdated for 3 years. Plunging people into arrears, through no fault of their own, and creating misery.”
In her Hampshire seat multiple occupancy homes, providing cheaper accomodation for young people starting out in work, have already been used to help boost regeneration in Gosport High Street. Similar schemes work up and down the country but could now be put at risk by the change in policy on council tax.
Added to that council tax figures are set to rise by up to five percent in the next year after Mr Hunt lifted the cap on increases in the Budget.
While many parts of England have not changed the rules on HMOs, Dame Caroline fears that the changes in counties like Hampshire could end up being rolled out across the UK.
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Dame Caroline said: “HMOs have shared cooking, living and often washing facilities.These bedrooms clearly do not pass the self-containment test. By re-banding, it is determining that each bedroom is a separate dwelling and is making the tenant liable for council tax on a bedroom.
“Essentially, each room can now be reclassified as a band A, with tenants charged individually, becoming liable for their council tax, and only able to apply for a 25 percent single-person discount. They would have previously been a Band C or D, for which the landlord would be liable.”
MPs are set to debate her amendment in the Report stage of the Bill on Wednesday.
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