Who Should Pay Council Tax on a Rental Property, the Tenant or the Landlord?

There are many things to consider when it comes to Council Tax. In rental properties, the tenant is usually responsible for paying council tax, but there are certain exceptions and circumstances where the landlord will pay.

Council Tax is a regular topic of discussion for people looking to rent a property and it’s not always clear who is responsible for paying it. In this guide, we will go over what Council Tax is and try and cover everything you need to know regarding who is responsible for paying it.

What is Council Tax?

Council Tax is a local tax set by the council or local authorities which is payable by every domestic or residential property. It covers the fees of local services such as the council as well as the police and fire services.

How Is Council Tax Calculated?

Council Tax is calculated through a band system and you will pay more or less depending on the band that your property falls into. The bands are usually ranked from A – H, with properties in council Tax band A being the lowest.

The prices of the bands vary from area to area, so it is different for each council. The band your property is placed under depends on a variety of factors so it can be difficult to pinpoint exactly how the price is calculated. Two big contributing factors are usually the specific area of the property, and how much it sold for in the past.

Who pays Council Tax?

This is a commonly asked question regarding Council Tax and the answer isn’t always straightforward. Typically, the occupier of the property is liable to pay the Council Tax, but it isn’t always as simple as that.

Of course, if you live alone and are the sole occupier, then it is up to you to pay the Council Tax. If you live with others, there is a hierarchy that determines who is responsible for paying.

  1. A resident owner-occupier who owns either the leasehold or freehold of all or part of the property
  2. A resident tenant
  3. A resident who lives in the property and who is a licensee. This means that they are not a tenant, but have permission to stay there
  4. Any resident living in the property, for example, a squatter
  5. An owner of the property where no one is resident.

The hierarchy works from top to bottom, so you can always work out who is responsible for paying the Council Tax. If there is a group of you living together, then the tax can usually be split between you providing there are no people exempt from paying.

Does the tenant pay Council Tax when renting, or is it the landlord’s responsibility?

Council tax considerations for landlords and tenants

As highlighted in the hierarchy, in the majority of situations it is the tenants responsibility to pay the Council Tax, however there are some circumstances in which this isn’t always the case.

When might the landlord responsible for paying Council Tax?

Under certain circumstances, it is the landlord that is liable for paying the Council Tax and not the tenants. Below is a list of circumstances in which the landlord is responsible for the Council Tax rather than the tenants:

  • The occupant or occupants are all under the age of 18
  • The property in question is a care home, hospital, or refuge
  • The occupant or occupants are asylum seekers
  • Temporary rentals to cover instances where your main residence is undergoing emergency work
  • The property in question is a HMO (House of Multiple Occupancy) and all occupants pay rent individually. However, although the landlord is technically responsible for the Council Tax, it’s likely that the rent will be adjusted to cover the cost.

Is a landlord liable for unpaid Council Tax?

This will depend on whether the property was vacant or not. If a tenant has been living in a property and it is stipulated in the tenancy agreement that they are liable for Council Tax, then the landlord will not have to cover any unpaid debts missed by the tenants. In this scenario, the tenant is still liable to pay the Council Tax that they owe even after moving out.

If the property is vacant and has no tenants living in it, then the landlord is liable for paying the Council Tax.

Do landlords pay Council Tax on empty properties?

As mentioned above, landlords are liable to pay Council Tax on their properties if they have residing tenants. However, some councils may offer discounts to landlords if their properties are empty. Although, this is entirely dependent on the council and local situation.

Discounts and exemptions

Depending on your situation, you may qualify for a discount or be entirely exempt from paying Council Tax. Some of the people who qualify for exemptions include the following:

  • Full time students
  • Live in carers
  • Tenants under the age of 18
  • Young people on government training schemes, apprentices, or foreign language assistants
  • Patients who are living in a hospital
  • A spouse or a dependant of a student and a non British Citizen who is not allowed under immigration rules, either to work in the UK or claim benefit
  • Members of visiting armed forces and their dependants
  • Members of a religious community

In terms of discounts, the most common reductions on Council Tax are as follows:

  • Occupants that live alone qualify for a 25% discount
  • Anyone who is not regarded as an adult can qualify for a 50% discount
  • Students and members of the armed forces can qualify for a 100% discount (exempt).

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