The Welsh Government has laid regulations before the Senedd that will change how Houses in Multiple Occupation are treated for council tax purposes, bringing the nation into line with the approach already taken in England.
Single banding for HMOs from June
The Council Tax (Chargeable Dwellings and Liability for Owners) (Amendment) (Wales) Regulations 2026 will come into force on 3 June 2026. Under the new rules, HMOs will generally be assessed as one property for council tax purposes rather than being split into multiple individual units.
The regulations follow a 2024 consultation that supported restoring the longstanding position that HMOs should be valued as a single dwelling. In recent years, some Welsh HMOs have been valued on a disaggregated basis, with each unit banded separately and occupiers billed individually.
The changes will apply to both licensed and unlicensed HMOs but will not operate retrospectively. Owners of properties previously assessed on a disaggregated basis may need to make a proposal to the Valuation Office Agency to amend the valuation list.
Importantly, the regulations confirm that the property owner – not the tenants – will remain liable for council tax. This removes the ambiguity that has arisen in some cases where individual occupants were treated as responsible for their own council tax bills.
Propertymark said: “We are pleased to see a clear definition included in these proposals. Property agents operating in Wales under the current system have reported that, because Local Authorities have the discretion to define what an HMO is for the purposes of Council Tax, there is variation between different areas, with some contract holders paying high bills and others not paying at all.”
What this means for Welsh HMO landlords
This follows Residential Landlord’s coverage of Wales confirming short lets licensing from 2029, which highlighted the increasing regulatory focus on property owners in the nation. The latest changes form part of a broader effort to create consistency across different property types and tenure arrangements.
For landlords operating HMOs in Wales, the key practical effect is certainty. Council tax liability will sit clearly with the owner, allowing for more straightforward financial planning. The single-banding approach also simplifies interactions with local authorities, particularly for agents managing properties on behalf of landlords.
However, landlords whose properties were previously disaggregated may face a transition process. Where tenants have historically paid council tax directly, landlords will need to factor this cost back into their operating expenses from June. The requirement to apply to the VOA for revaluation adds an administrative step for affected properties.
HMO compliance remains a key focus for regulators across the UK. The Welsh changes arrive as local authorities intensify enforcement efforts, with significant penalties issued to landlords who fail to meet licensing and safety requirements.
The regulations align Wales with England, where HMOs have long been treated as single dwellings for council tax, with owner liability the default position. Further details are available in the Welsh Government’s written statement.
Opinion
This brings welcome clarity to a system that has created confusion for landlords, agents and tenants alike. The variation between local authorities has been a persistent source of frustration. Whether the transition proves smooth for landlords with disaggregated properties remains to be seen – the VOA application process could create delays. For now, though, Welsh HMO landlords finally have a clear answer to who pays the council tax bill.
