Do landlords pay council tax?

More often than not, tenants are responsible for council tax unless they are exempt. In such cases, the landlord will be liable to pay council tax. 

However, it’s fair to say that there isn’t exactly a single, clear-cut answer to the question of who pays council tax in rented property. It essentially depends on the type of tenancy and property occupants

So, do landlords pay council tax? If not, who is responsible for footing the bill? Read on for the full lowdown.

Who is responsible for council tax in rented property?

On the surface, knowing who is responsible for council tax seems straightforward enough. But the reality is that when it comes to rented property, there is a hierarchy that dictates who has to pay up and works from top to bottom. The hierarchy is as follows:

  1. A resident owner-occupier who owns the freehold or leasehold of the entire property (or part of the property)
  2. A tenant on an assured shorthold tenancy agreement
  3. A resident who is a licensee (they have permission to live in the property) but is not a tenant
  4. Any resident living in the property, such as a squatter
  5. An owner who doesn’t live in the property

It’s worth noting that liability must be shared equally between residents at the same level of the hierarchy. This means that even in cases where tenants do not know each other before moving into the property, they are jointly liable to pay council tax. However, this hierarchy only applies when tenants are on a joint tenancy agreement. Below we’ll take a look at who pays council tax when tenants are on separate tenancy agreements.

Coins on council tax bill

Do landlords pay council tax for HMOs?

If the landlord has several tenants with individual tenancy agreements, also known as houses of multiple occupancy (HMO),  the landlord is responsible for the council tax bill. 

Say, for example, there are three people each renting a separate room in your property, as the landlord, you will shoulder the responsibility of paying council tax. In most cases, the cost of council tax will be included in the rent for a HMO to recoup potential losses.

Do landlords pay council tax for students?

Generally speaking, if your property is occupied solely by students, both landlords and tenants are exempt from paying council tax. 

It’s worth noting that the students must be in full-time education for the property to be exempt from council tax. If only one of your tenants is in full-time education, then the property will not be exempt from council tax. Though the other tenants will be responsible for paying the bill and not you. Plus, they may qualify for a discount. Head over here for more advice on renting to students.

Similarly, tenant’s liability for council tax is reserved when:

  • The property occupants are all under the age of 18
  • The residents are asylum seekers
  • The property is a refuge, hospital or care home
  • The main residence is no longer habitable and tenants must move to temporary accommodation

Council tax bill

Do landlords pay council tax on empty properties?

If there are not any tenants in residence, the landlord will be responsible for council tax. Don’t worry! The good news is that you may not have to pay the full amount. In the past, councils have offered discounts of up to 50% on council tax bills for empty properties. 

However, some councils may still charge the full amount. In very rare cases, you may even find that you are liable for council tax on a property that has only been empty for a brief period. Though, it’s advisable to contact your local council to find out how much you could be charged.

Is a landlord liable for unpaid council tax?

As long as the tenancy agreement clearly sets out that the tenant or tenants are responsible for paying council tax, landlords are usually not liable for unpaid council tax.

It’s wise to keep a record of the tenancy agreement to avoid potential disputes later down the line. That way, there will no confusion over who has to foot the bill for council tax.

On top of that, it’s a good idea to notify the council when a tenancy has ended and when new tenants move in. 

'Coucil' written on wooden blocks

We hope you now have some clarity on who is responsible for council tax in rented properties. Regardless of who you are renting to or who is responsible for council tax, it’s always a good idea to get landlord insurance. A good landlord insurance policy will cover you against things happening in your property when your tenant is the resident. We at CIA Landlords can help you find an affordable policy! All you need to do is get a quote or request a callback today.

Looking for more expert advice for landlords? Visit our advice centre where we cover property maintenance and interiors, utilities and much more.