Council tax in a UK rental property is usually paid by the tenant; however, the landlord will pay council tax in certain situations, such as during void periods or for Houses in Multiple Occupation (HMOs).
The price of council tax will depend on the local authority, varying significantly across the UK. As a landlord, it is part of your responsibility to know which taxes must be paid by you for your rental properties and how much.
It can be difficult to understand the complexities that come with being a landlord, with countless financial obligations and ever-changing legislation. At J Property Management, we can help. We partner with landlords across London and the rest of the UK to help them stay on top of landlord responsibilities and streamline their duties.
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What Is Council Tax?
Council tax is a tax set by local authorities and paid by residential properties. The price varies between local authorities and is graded based on the property value.
Who Is Responsible For Paying Council Tax In UK Rentals?
Tenants are usually responsible for paying council tax in UK rentals. The landlord will only pay council tax for UK rentals in specific circumstances where the tenants are exempt.
When Does The Landlord Pay For Council Tax In A UK Rental Property?
The landlord will pay for council tax in a UK rental property if the tenant is exempt for any reason from paying council tax. Here are some of the cases where tenants might be exempt from paying council tax:
- The tenant or tenants are all under the age of 18
- The property is a House of Multiple Occupancy (HMO) where all tenants pay rent individually
- The property is a hospital, care home or refuge
- The tenant or tenants are asylum seekers
- If the property is a temporary rental while your main residence is undergoing emergency work.
In some of these cases – for example, for HMOs or for tenants under 18 – the property will still be billed the council tax but the tenants are not expected to pay. Landlords in these situations could choose to add this as part of the rent to cover costs.
Landlords will also pay the council tax during void periods. Although there are no tenants in the property, council tax still needs to be paid and this is the landlord’s responsibility.
If the landlord lives in the property alongside tenants or a lodger, they assume responsibility for the council tax.
In any of these cases, the landlord must factor council tax in when calculating potential landlord profit.
When Do Tenants Pay Council Tax In A UK Rental Property?
Tenants pay council tax in a UK rental property if the whole property is on a single tenancy agreement. For example, if the landlord rents the whole property to one person, a couple, a family or joint tenants, the tenant is responsible for council tax and will receive the bill directly.
Any tenancy agreements that are 6 months or more will be the responsibility of the tenants. If the tenants leave the property before their tenancy agreement is up, they will still be financially responsible for the council tax bill until the agreement ends or another tenant takes it over.
Is Council Tax The Same Across The UK?
No. The council tax is determined by the local authority so it varies between local constituencies. As the tax is designed to cover local services – including cleaning, education, public spaces – it depends on the local area and its amenities.
There is significant variation across the UK, with Pendle, City of Nottingham and Burnley among the top 3 most expensive council taxes in the UK. Surprisingly, the lowest council taxes are found in the City of London, properties in Wandsworth, Westminster and Kensington and Chelsea – home to some of the UK’s most expensive properties.
All residential properties in the local area are separated into different bands – A to H – which have different price ranges for property values. The council tax is based on which band the property falls into. Each local authority has their own pricing policies for each band.
What Happens If You Can’t Pay Council Tax?
If for any reason you can’t pay council tax, you should contact your local council as soon as possible.
Remember to check if you are exempt from council tax or if there are discounts available – such as for students, disabled individuals or people living alone. It’s always worth checking as low income individuals or those on benefits could be entitled to a council tax reduction.
Understand Landlord Tax Obligations With J Property Management
At J Property Management London, we work with landlords across the UK to manage their property (or multiple properties). From drawing up watertight tenancy agreements that clearly state the landlord and tenant responsibilities, to ensuring financial and legal compliance for all our landlords, we can help. Talk to our team today to see how we can help you get the most out of your property investment and keep up with all landlord responsibilities.
