Council Tax Explained for Tenants

If you have lived in the UK for a number of years now you will no doubt be familiar with the notion of Council Tax.  

If, on the other hand, you have just moved to the UK from abroad, it may be something you have never encountered before. Either way, in this article we will outline exactly what the Council Tax is, and who is responsible for paying it. 

What Does Council Tax Pay For? 

Introduced in 1993, the Council Tax replaced the previously named Community Charge (or Poll Tax). This in turn replaced the rates system in England, Scotland and Wales. 

Council tax is a monthly payment tenants make to pay for local services such as bin collection, road repairs, fire brigade and police services etc.  

There is one payment per property (regardless of how many individuals live there). If there is only one person living in that property, however, there is a discount. 

How Much Is the Council Tax?

The Tax varies from geographical region to the size of a property, the number of rooms it has and where it is located. Residences are categorised into bands. Different bands have different charges, as worked out by the Valuation Office Agency (VOA).  

In the case of the Council Tax the charge is worked out on the basis of how much the property is worth on the open market. This is different to the Community Charge and rates system which were both based on the rental value of the property. 

How much a particular band costs can change on an annual basis. It’s possible to check the Council Tax cost of a particular residency and band by checking the local council’s website. 

Who Pays Council Tax on a Rented Property?

Firstly, only adults aged 18 and over have to pay Council Tax. The owner of a property who is living there pays the tax. If it’s a tenant, then he or she pays it. In fact, anyone living in that property – even a squatter – is due to pay Council Tax.  

If the owner of a property lives elsewhere and the property remains empty then he or she would have to pay Council Tax for it. If there is more than one individual living in the property ie a couple or a group of friends, then each adult is individually responsible for paying the Council Tax. 

The exception to the above is if the property is a House in Multiple Occupation (HMO). This is when more than three tenants rent a room in the property. It could be young professionals or students. In either case, it is the landlord who pays the Council Tax under these circumstances. No doubt the landlord will take this into account when working out the cost of the rents per room. 

Then again, if the tenants in the HMO are renting the property as one group of friends or colleagues etc then they will be jointly responsible for the Council Tax. 

What if the Rental Property Is Empty?

An empty rental property is usually the result of a tenant having moved out and the landlord hasn’t been able to find another to take over. This is known as a void period and it’s what every landlord is desperate to avoid (because it means he or she falls short that month). 

In such a situation the landlord or property owner is responsible for paying the Council Tax. The good news is that some councils will provide a Council Tax discount to registered landlords when the don’t have a tenant living there. It is always work checking the website to see if your council does. 

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