Council tax applies to all residential properties in the United Kingdom. It funds local services, such as waste collection, policing, and education. But who pays the council tax: tenant or landlord? We'll discuss that in this article and explore the answers to commonly asked questions about council tax for rented properties.
The responsibility for paying council tax when renting depends on the type of occupancy of the property: single occupancy or HMOs.
If your property is occupied by a single household (e.g. family) or up to 2 unrelated tenants, the tenants are responsible for paying council tax. They’ll receive the bills directly from the council and pay them without your involvement.
If it’s a fixed tenancy contract of 6 months or more, the tenant is responsible for paying the council tax until the end of their tenancy. Once their contract ends, the landlord must take over paying the tax.
For agreements less than 6 months, tenants are only responsible while living in the property and the landlord takes over if they leave early.
If the tenancy becomes a statutory periodic tenancy after the fixed-term contract has ended, the tenant can leave whenever they like and the landlord will be responsible for paying council tax. To avoid this, your contract must state that the tenancy will continue after the fixed term ends, making it a contractual periodic tenancy. This will keep the tenant responsible for paying council tax until they end their tenancy and leave after their notice period.
Tenants who live solo should apply for a 25% discount on their tax bill.”
If a property is officially considered an HMO (house in multiple occupations), the landlord pays council tax. However, to cover the cost, you should adjust the rental price accordingly.
Remember that a property is only considered an HMO if it’s occupied by 3 or more tenants forming more than 1 household.”
Landlords pay council tax only when a property is empty for over 7 days.
But let’s get a closer look at each situation.
No one has to pay tax for an unoccupied and unfurnished property for up to 7 days.
If the property remains empty for over 7 days, such as during void periods, the landlord must pay council tax for the entire vacancy duration.
If your home has been vacant for 2 years or more, you may pay extra council tax (premium), which will keep increasing the longer the property remains unoccupied. If the property is vacant for over 10 years, your premium can be up to 4 times the regular council tax.
You usually receive council tax bills in April and must pay in 10 instalments. If required, you can ask to pay in 12 instalments instead. Some councils may accept weekly or fortnightly payments. Others may reduce the total bill if it is paid all at once, at the beginning of the year.
Your council tax bill is calculated based on several factors:
Valuation band: Each property in the UK is assigned a valuation band by the Valuation Office Agency (VOA) based on its value as of April 1, 1991. The valuation bands range from A to H, where A band pays the least and H pays the most tax.
Local authority: Each local authority sets its own council tax rate for each valuation band. The tax rate changes each year.
Discounts and exemptions: Some households may be entitled to discounts or exemptions on their council tax, such as single occupier discount, student exemption, or disability reduction.
Find out the council tax band for a home in England or Wales by looking up its address or postcode.”
If you or your tenant are eligible for a discount or exemption, you still must apply for it. You must pay the council tax bill until you hear the decision from your local authority.
Landlords of HMOs should always check tenants' circumstances to ensure they're paying the correct amount. Be ready to provide paperwork to prove your tenant's eligibility. If a discount is given incorrectly or a tenant moves out, you should rectify the situation immediately to avoid fines.
Typically, reductions to the council tax bill are implemented according to the following rules:
These categories of people are considered disregarded:
To ensure you stay on top of your council tax responsibilities and avoid any unexpected bills, follow these simple tips:
At HousingAnywhere, tenants usually book their accommodation 2–3 months ahead of time. This gives you ample time to pick the perfect candidate, fill up your property in time, and save money on council tax and utilities. Join our platform today to find your next tenant!
This article is for informational purposes only. Please consult the appropriate authorities for the latest developments or a lawyer for legal advice.
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