Liability for council tax
The owner or resident of a property is normally liable to pay council tax to the local authority based on a hierarchy of liability.
Who is classed as resident
Council tax is normally payable by the sole or main resident of the property. A resident is a person aged 18 or over who lives in the property as their sole or main residence.[1]
Someone is always liable for council tax unless the property is exempt.
Sole or main residence
Sole or main residence means the property where a person resides.
The local authority must establish which property is a person's sole or main residence if they live in more than one place.
A person's main residence is the property that a reasonable onlooker, with knowledge of the facts, would view as the person's home.[2]
How the local authority determines who is liable
A hierarchy of liability sets out who is liable to pay council tax if more than one person is resident at a property.
The hierarchy list is read from the top and the first applicable definition is the liable person. The order set out in the hierarchy of liability is:[3]
a resident with a freehold interest in the whole or any part of the property
a resident with a leasehold interest, including an assured or assured shorthold tenancy which is not inferior to another such interest held by another resident
a resident who has a statutory tenancy, secure tenancy or introductory tenancy
a resident who is a licensee with a contractual license to occupy
any other resident, including a squatter
The owner is liable if there is no resident. An owner includes anyone with a material interest in the property.[4]
Tenants and leaseholders
A material interest includes a leasehold interest granted for six months or more.[5] This can include an assured, assured shorthold or secure tenant with a fixed term or periodic tenancy.
Terms in a tenancy agreement do not override the hierarchy of liability. For example, a term stating the landlord will pay council tax does not affect the tenant's liability to the local authority.
Joint liability for council tax
Two or more residents who fall into the same category on the hierarchy are jointly and severally liable for council tax.[6]
This situation typically occurs when residents are joint tenants or joint owners. A joint tenant or owner who is a student or is severely mentally impaired is not jointly liable.[7]
In Wales, a joint tenant or owner who falls within the definition of a care leaver[8] is not jointly and severally liable.[9]
A joint tenant or owner who moves out of the chargeable dwelling no longer falls into the same category on the hierarchy. The remaining resident is solely liable from the date the joint tenant or owner moved out.
Joint liability of couples
A partner of a liable resident can be jointly and severally liable if they do not fall into the same category on the hierarchy.
The partner of a liable resident is held jointly and severally liable where they live in the relevant chargeable dwelling and they are either:[10]
married to or in a civil partnership with the liable resident
living together as if they were a married couple or civil partners
A joint tenant or owner who is a student or is severely mentally impaired is not jointly liable.[11]
In Wales, the partner of a liable resident who falls within the definition of a care leaver is not jointly liable.[12]
A member of a couple who moves out is no longer liable for council tax. The remaining resident is solely liable for council tax from the date the member of the couple moved out.
Student accommodation exemptions
Student halls of residence are exempt from council tax.[13] No council tax is payable on the property by anyone.
Private dwellings occupied by students
A dwelling solely occupied by students is exempt from council tax.[14]
A student's spouse, civil partner, or dependent resident in the dwelling does not affect this exemption if they are:
not a British citizen
prevented from working or claiming benefits
Student has the same meaning as it does for council tax discount purposes.
Houses in multiple occupation
A tenant or licensee who lives in a House in Multiple Occupation (HMO) is not liable for council tax. The owner of the HMO is the liable person.[15]
An HMO is normally classed as a property where three or more tenants live who are not a single household and who share a bathroom or kitchen.
The HMO is always treated as a single dwelling for council tax billing.[16]
Definition of an HMO for council tax
Specific regulations define an HMO for council tax.[17] The definition is broadly the same as the general definition of an HMO, with some exceptions.
A converted property, sometimes called a section 257 HMO, is not classed as an HMO for council tax.[18]
Properties exempt from HMO regulations are not exempt from the definition of an HMO for council tax.[19]
Hostels and homeless accommodation
A hostel normally meets the definition of an HMO for council tax purposes. If so, the owner of the hostel is liable for council tax.
Homeless accommodation
Who is liable for council tax depends on the type of accommodation.
Emergency homeless accommodation provided by the local authority can include hostels or bed and breakfast accommodation. The accommodation normally meets the definition of an HMO and so the owner is liable for council tax.
When temporary accommodation provided does not meet the definition of an HMO, the resident is liable for council tax. The hierarchy of liability applies when there is more than one resident.
Liability after a tenant moves out
A tenant's council tax liability does not always end when they move out of the property. They might be classed as the property owner for council tax purposes and be liable for the empty property. A former tenant could be liable to pay council tax on two properties at once.
During a fixed term tenancy
A fixed term tenancy runs for a specific period, normally six or 12 months. It has an identifiable start and end date.
A tenant is liable for council tax if they have a fixed term of six months or more and the tenancy has not ended. Their council tax liability continues even after they leave the property.
How long the council tax liability continues depends on whether the tenancy agreement states it will become a periodic tenancy after the fixed term ends.
When a fixed term tenancy ends
A tenant's liability for council tax when a fixed term tenancy ends depends on their agreement.
Contractual periodic tenancy
The tenancy continues as a contractual periodic tenancy if the agreement states it becomes periodic when the fixed term ends.[20] A contractual periodic tenancy is an extension of the original agreement.
If the fixed term was for at least six months, and the agreement specifies that it will continue, the tenant remains liable for council tax until the contractual tenancy ends. This applies even after they leave the property.
Statutory periodic tenancy
A statutory periodic tenancy arises at the end of the fixed term if the tenancy agreement does not state what happens at the end of the term.[21] This is a new tenancy, separate from the original fixed term.[22]
A statutory periodic tenant is not liable for council tax after they leave the property. The tenancy is a periodic tenancy and the material interest is for less than six months.
When a tenancy has been periodic from the start
A periodic tenancy does not have an end date. It runs from period to period. For example, monthly or weekly.
When a tenancy has been periodic from the outset, the tenant's council tax liability ends on the day they move out of the property.
How a tenant can end a tenancy
A tenant's council tax liability ends when they end their tenancy by giving a valid notice to quit or agreeing on a surrender.
How a tenant can end their tenancy depends on their tenancy type.
Liability after death of resident
When a resident dies and there is no other liable resident, the personal representative or administrator dealing with the deceased’s estate becomes liable for council tax in their capacity as executor.
The dwelling is exempt from council tax if it is unoccupied from the date of death.[23] The exemption applies indefinitely until probate or letters of administration are granted. Once probate or letters of administration are granted, the exemption applies for up to six months from the date of the grant.[24]
Council tax arrears are recovered from the deceased’s estate.
Last updated: 11 November 2024