Council tax and rental properties

Lorraine DindiLorraine Dindi
Last updated on:
February 3, 2022
Published on:
November 9, 2021

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Council tax is an important consideration for anyone managing a rental property. The consequence of ignoring it and thereby not paying it is hefty— the local council can take you to court and even apply to have money taken from your wages or benefits. Read on to learn all that you need to know about council taxes.

What is council tax?

Introduced by the Local Government Finance Act 1992, council tax is a fee on domestic property. It is charged annually (but usually paid in 10 or 12 month instalments) by the occupiers of residential property in England, Wales and Scotland.

How is council tax calculated?

Every property in England is assigned one of eight “bands” by the Valuation Office Agency  depending on the value of the property on 1 April 1991. In Wales, there are nine such “bands” and the property is valued depending on how much it would have sold for on the open market on 1 April 2003. Then every year, each local council decides on the tax rate to charge each band.  Naturally, the more valuable a property, the higher the rate of council tax charged on it. An individual property’s council tax rate is calculated based on the nature of the property itself and that of any household living in it; there are some discounts and exemptions for certain types of properties and certain categories of people.  

Who is responsible for paying council tax?

This is usually the occupier of the property, so in a rental this would be the tenant. If there is a lodger living in the premises as their main home, they may also have to pay council tax. Where there are multiple tenants, then council tax may be shared between them.

Please note that when the landlord is still looking for a tenant and the property is unoccupied, then the landlord will be responsible for paying this tax. Other situations where a landlord is liable for council tax include situations where the property is a House in multiple occupation; the tenants are living elsewhere temporarily; the tenants are under 18 years of age; or the tenants are asylum seekers.

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What happens if you don’t pay council tax?

If your council tax is in arrears then the local council is likely to chase up with notices and demands for payment. They can then start court proceedings and apply for sums to be taken from your wages or any benefits you receive. Bailiffs could be sent to collect the arrears from you. A court could even sentence you to up to 3 months in jail if you still refuse to pay. It is best to not forget to pay council tax.

What is council tax used for?

Council tax is important because it is used by the local council to fund local services such as rubbish collection, park and sport centre upkeep, road maintenance, public administration and record-keeping, street lighting etc. A proportion of the tax goes to the local fire and police services.

How to pay council tax?

Once you receive a council tax bill, you can pay it online or through other methods at a post office, bank, newsagent or convenience store. You can check your property’s valuation band here and find out how to start paying it here.

About Legislate

Legislate is a contracting platform where letting agents and landlords can create valid agreements which address council tax and which party is responsible for paying it.

To create your first Legislate contract, watch a demo or book an introductory call.

The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.

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