The government said HMOs could offer people affordable housing and that demand had risen over the last few years. It said it was concerned that as some HMOs in Wales were not aggregated for council tax purposes, this could have an “adverse” impact on property owners and tenants.
It has proposed charging HMOs a single council tax bill to “provide greater certainty and consistency”.
The government said putting the decision on the Valuation Office Agency (VOA) had caused “confusion and inconsistency in the tax base”.
It also said the English government’s decision to impose a single council tax bill on HMOs had created a disparity in how properties in Wales and England were treated.
The Welsh government said more consistency was needed, and it wanted to ensure the liability of the tax was on the property owner, not tenants.
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“This will also provide parity of the treatment for HMO properties in Wales with England,” it added.
Propertymark welcomed the proposal, saying the existing system sometimes meant council tax bills for HMOs were higher than those for other properties in the same location.
The trade association said if the proposal was approved, landlords should be able to charge tenants council tax as a permitted payment. Propertymark said this would enable landlords to get reimbursed from the cost of aggregated council tax.
Tim Thomas, policy and campaigns officer at Propertymark, said: “The existing system that results in council tax being disaggregated needs some urgent reform, as it leads to each HMO unit being regarded as a separate dwelling. We then end up with a disproportionate billing system, where contract holders are paying more than other residents in the same area.
“Furthermore, local authorities should be prohibited from charging landlords council tax even after the tenant has moved out with no forwarding details.
“It would be better if council tax is slashed for contract holders as a result of the suggested changes from the Welsh government, as HMOs become a very popular and affordable choice for low-paid contractors or those receiving means-tested benefits at a time when people are already struggling with expensive bills.”