This question is not always as straightforward as many people assume. Council tax is payable on all domestic properties across England and Wales, and, as a broad principle, it is the occupant who is responsible for paying it; however, this isn’t always the case.
In the general ‘hierarchy of liability’ on who pays council tax on a rented property, a resident tenant on an assured tenancy agreement ranks higher than the owner of the property who doesn’t live there. In the majority of cases, then, it is the tenant who is expected to pay the council tax bill. There are also, however, some instances in which it may be the landlord’s responsibility to pay council tax on a given rented property. These include if any of the below conditions apply:
- The occupant or occupants are all below 18 years of age
- The given property is a care home, refuge, or hospital
- The occupant or occupants are asylum seekers
Another example of the aforementioned hierarchy not applying is when the rented property is a house in multiple occupation, or HMO, with the tenants all paying rent in accordance with their own separate tenancy agreements. In this case, it is technically the property owner – the landlord – who is responsible for paying the council tax. In practice, however, it is common for the landlord to simply adjust the rent they charge to their tenants to cover this cost. Alternatively, the property in question may have multiple tenants, but they may be renting the entire property on a single, joint tenancy agreement. In this instance, these tenants are regarded as jointly liable for the council tax bill. During times when a rental property is unoccupied with no tenants in residence, it is the landlord who becomes responsible for paying council tax on the property. Local authorities are entitled to decide how much of the council tax bill to charge.
It wasn’t unheard-of not so long ago for councils to offer landlords a 50% discount on their council tax bill when their property was empty. However, this has become less likely amid concerns about ever-increasing numbers of empty properties in recent years.
Overall, as a landlord, you are advised to make clear in the tenancy agreement who will be responsible for paying council tax during the tenancy. You will also need to budget for paying this tax during the times the property is unoccupied.
For further advice in relation to council tax and the related aspects of owning and managing a rental property, please don’t hesitate to contact our experts in Burnley, Ramsbottom or Radcliffe.