Tenants and Council Tax

Council tax is a tax on domestic properties that is collected by local authorities. Generally council tax is relative to the size of the property so the bigger the property the greater the tax owed.

The proceeds of council tax is used to fund local services such as schools, rubbish collection, police and fire services and more. The person responsible for paying council tax, called the liable person, is usually whoever lives in the property (and is over 18 years of age). If a couple is living together, then both partners are liable. There are some differences in council tax requirements across the UK, and while this article offers basic information, it is advised that those requiring advice speak with a professional regarding their specific situations.

England

In England, the person liable for paying council tax is usually the person who lives in the property which means that it might not always be the owner of the property paying the tax. There are exemptions to this though; the owner of the property will be liable for council tax if:

• The tenants/inhabitants of the property are all under 18 years of age
• The tenants/inhabitants are all asylum seekers who are not entitled to claim benefits
• The tenants/inhabitants are only temporary and keep main households at another location
• The property is used as a care home, hospital, hospice or women’s refuge
• The property is divided into a number of different households and each pays rent separately

If the above do not strictly apply to a property, then a hierarchy of liability kicks in to help ascertain which inhabitant is the liable person. This hierarchy includes:

1. An owner who occupies the property (the owner can be of either the leasehold or the freehold of all or part of the property).
2. A tenant
3. An inhabitant who is not a tenant but has permission to stay at the property
4. An inhabitant living in the property (may include squatters)
5. An owner who is not resident if the property is not inhabited by anyone else

Scotland

While exemptions also exist in the Scottish council tax system, the tenant is also usually the liable person for council tax. The hierarchy of liability is slight different to that of England though. In Scotland, the hierarchy includes:

1. An inhabitant who owns all or part of the property
2. An inhabitant who is a tenant of all or part of the property
3. An inhabitant who is a sub-tenant of all or part of the property
4. An inhabitant who is not a tenant/has no security of tenancy
5. An owner who is not resident unless the property also has a non-resident tenant or sub-tenant who has a lease or sub-lease of six months or longer

Wales

Like in England and Scotland, certain types of properties are also exempt from council tax in Wales. Some of these properties include:

• Empty properties
• Properties undergoing major repairs
• Condemned property (that no one should be living in anyway)
• Re-possessed property (now technically owned by a mortgage provider)
• Property inhabited strictly by students
• Property inhabited strictly by under-18s or those with severe mental impairments
• Caravan or boat that exists on a property for which council tax is paid
• Property left vacant because the inhabitant is being cared for elsewhere, or is elsewhere caring for someone else

A hierarchy of liability for council tax also exists in Wales. This hierarchy is similar to those in England and Scotland and includes:

• An inhabitant of the property who owns the freehold
• An inhabitant of the property who has a lease
• An inhabitant of the property who has an assured or an assured shorthold tenancy
• An inhabitant of the property who is a protected, statutory or a secure tenant
• An inhabitant of the property who is not a tenant but has permission to stay there
• Any other inhabitant of the property, such as a squatter
• An owner of the property who does not live there (if no inhabitants exist)

Northern Ireland

There is no council tax in Northern Ireland, but instead there are domestic rates. As of April 2007, the domestic rating system is based on the capital value (the amount the property could reasonably be sold for) of the property on 1 January 2005. The Land and Property Services Agency has more information on domestic rates in Northern Ireland.

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