Council tax in a house share (HMO): who pays in 2026

What counts as an HMO for council tax

An HMO (house in multiple occupation) is a property occupied by people who do not form a single household. The Housing Act 2004 definition includes a property occupied by three or more people forming two or more households who share a kitchen, bathroom or toilet. For council tax purposes the key threshold is whether the HMO is licensable. A property is licensable under the mandatory HMO licensing regime if it has 5 or more occupants forming 2 or more households.

The mandatory licensing regime was extended in 2018 to remove the previous 3-storey requirement. So a single-storey 5-bedroom house with five unrelated tenants is now licensable, even though it would not have been before 2018. Local authorities can also bring smaller HMOs into licensing through additional-licensing schemes; many councils with high student populations operate such schemes. The full list of licensable schemes per local authority is on each council's website.

The December 2023 regulation change

The Council Tax (Chargeable Dwellings and Liability for Owners) (Amendment) (England) Regulations 2023, in force from 1 December 2023, clarified and extended the rules on HMO landlord liability. The change addressed years of ambiguity over which HMOs were subject to landlord liability and aligned council tax liability more closely with HMO licensing.

Under the amended regulations, an HMO that is licensable under the Housing Act 2004 is also subject to landlord liability for council tax. The exception is where the property has been split by the Valuation Office Agency into separate dwellings (each with its own band), in which case each separately-banded dwelling has its own liability under the standard section 6 hierarchy. The change has reduced the amount of dispute between councils and HMO landlords over who is the liable person, although disputes still arise where a property's HMO licensable status is itself in question.

The two main HMO scenarios

Scenario 1: Licensable HMO with landlord liability

You are renting a room in a 5-bedroom house with four other unrelated tenants. The landlord holds an HMO licence under the Housing Act 2004. The property is banded as a single dwelling for council tax. Under the amended 2023 regulations the landlord is liable for council tax; the council bills the landlord directly. You pay rent that includes a contribution to the council tax, although the landlord is the one whose name appears on the council's register and who pays the bill.

The landlord normally builds the council tax cost into the rent. If you are signing a new tenancy agreement, ask for an itemised breakdown showing how much of the rent covers council tax. You cannot separately claim the single occupant discount, council tax reduction or other discounts because you are not the liable person; if any discount applies, it has to be claimed by the landlord.

Scenario 2: Smaller house share on a single joint tenancy

You are renting a 3-bedroom house with two friends. You all signed a single joint tenancy agreement covering the whole property. The property is not licensable under the mandatory or additional HMO licensing scheme. Under section 6 of the Local Government Finance Act 1992, you are jointly and severally liable for council tax. The council bills the property in the names on the tenancy, and can recover from any or all of you.

Joint and several liability means the council can recover the full amount from any one of you, regardless of who actually paid the rent or who lives in which room. If one of your housemates moves out without paying their share, the council can pursue the remaining housemates for the unpaid amount. The remedy between housemates is a private matter outside the council's concern.

What about separate tenancy agreements?

If each tenant has their own separate tenancy agreement for a specific room and shared use of the common parts, the property is typically classed as an HMO for council tax purposes regardless of size. The combination of separate tenancies and shared facilities is the structural marker of an HMO. Where this applies, the council usually treats the landlord as the liable person under the Council Tax (Liability for Owners) Regulations 1992.

Where separate tenancies exist, the Valuation Office Agency sometimes bands each room as a separate dwelling, particularly where each room has its own kitchenette or en-suite. If that happens, each room has its own council tax bill, the tenant of that room is liable, and the property no longer functions as a single-banded HMO. This is a fact-specific assessment that the VOA makes on a case-by-case basis.

Additional licensing and selective licensing

Beyond the mandatory licensing scheme for 5-plus HMOs, local authorities can declare an additional HMO licensing scheme for smaller HMOs in their area. Many councils with student populations (Bristol, Manchester, Sheffield, Leeds, Nottingham, Liverpool, Newcastle and others) operate additional schemes that bring 3-occupant and 4-occupant HMOs into the licensing regime. When an HMO becomes licensable under an additional scheme, it also becomes subject to landlord liability for council tax under the 2023 amendments.

A separate concept is selective licensing, which can apply to any rented property in a defined area regardless of HMO status. Selective licensing does not change council tax liability; it is purely a property-management regime. The HMO licensing schemes are what matter for council tax.

Mixed-status tenants

HMOs with a mix of tenant types are common. A typical example is a 5-bedroom house where one tenant is a full-time student (entitled to the student disregard), one tenant is on Universal Credit (potentially entitled to council tax reduction), and three tenants are working full-time. In a landlord-liable HMO, the landlord cannot use individual tenants' discount entitlements; the bill is a single landlord-liability bill at the full Band D rate.

In a tenant-liable smaller house share (single joint tenancy), the household is treated as a single household for council tax discount purposes. The presence of one full-time student does not exempt the property; the working tenants remain liable for the full bill. The student is disregarded but the property is not exempt because the other residents are not students. This is a common source of confusion in mixed houses.

Student houses

If every adult resident in the property is a full-time student, the property is exempt from council tax. The exemption applies regardless of HMO status. So a 5-bedroom licensable HMO occupied entirely by full-time students pays no council tax, despite being subject to landlord liability in principle. The exemption has to be claimed through the council with student certificates from each occupant. We cover this in detail at council tax in a student house.

If you are a tenant of an HMO and the landlord is not paying

Where the landlord is the liable person but is not paying the council tax bill, the council pursues the landlord, not the tenants. As a tenant you are not personally liable for council tax in a landlord-liable HMO, and council tax enforcement action cannot be taken against you personally. The bills and any enforcement notices go to the landlord. If you receive a council tax bill or summons addressed to you personally for a landlord-liable HMO, contact the council immediately to correct the records.

Related scenarios

For other tenancy structures see our single-let renter page, student house, landlord with empty property, and Airbnb host pages. For per-band cost see Band D cost 2026/27; for how to pay, see how to pay council tax.