When assessing a property for council tax, focusing on the test for rateable occupation to identify the number of hereditaments is insufficient. It is also necessary to consider geographical and functional tests.
Council tax was introduced by the Local Government Finance Act 1992 on 1 April 1993 to replace the community charge or “poll tax” which itself replaced domestic rates on residential property. Council tax is payable in respect of a dwelling which is a hereditament wholly used for living accommodation.
In Michael Stanuszek v Dawn Bunyan (Listing Officer) [2023] EWHC 3275 (Admin), the High Court allowed an appeal against a decision by the Valuation Tribunal for England that six rooms let individually on assured shorthold tenancies were separate hereditaments for council tax purposes and remitted the case for redetermination.
The appellant owned a property in Park Royal, London, N10, which was licensed as a house in multiple occupancy. Each of the six rooms contained a bathroom and had a lockable door. Each occupier had exclusive occupation of their own room and shared use of the communal areas. None of the rooms contained cooking facilities or space for hanging laundry, which were undertaken in the communal areas. The rooms were let on assured shorthold tenancies and the landlord granted each tenant quiet enjoyment of their rooms and the communal areas.
The appellant contended that the whole of the property should be assessed as a single dwelling. The respondent argued that the property comprised six dwellings – one for each of the six rooms. The Valuation Tribunal dismissed the appellant’s appeal, deciding that each room constituted a separate hereditament because it satisfied the necessary requirements of rateable occupation which were (i) actual occupation; (ii) occupation was exclusive to the possessor; (iii) of value or benefit to the possessor and; (iv) possession was not for too transient a period John Laing & Son Ltd [1949] 1 KB 344.
The High Court agreed with the appellant that the Valuation Tribunal had conflated the test for rateable occupation and whether each unit was a separate hereditament. It had failed to apply the tests set out in Woolway (Valuation Officer) v Mazars [2015] AC 1862, namely whether the putative hereditament could be represented as a single unit on a plan and had the quality of visual or cartographic unity and whether intercommunication between two adjoining spaces was significant. A door or staircase leading directly from one living space to another suggested a single hereditament but if it was necessary to go through a common part or public area this was suggestive of separate hereditaments.
Louise Clark is a property law consultant and mediator
