Council Tax & Rental Properties

We are often asked by tenants and landlords “who pays the Council Tax?” and as simple as this question may seem to be, the answer is not necessarily as straight forward.

It is widely assumed that the tenant is responsible for paying the Council Tax bill and whilst this may apply in many instances, it is not necessarily the case for all rental properties.

We set out to explain some of the nuances of tenancies and rental properties which are treated differently for Council Tax purposes in this article.

So, what is Council Tax?

In its simplest form, Council Tax is a local tax set by a local authority (IE. A city council) which is graded by domestic properties and their values. The proceeds collected are then used to pay for services such as:

  • Education
  • Environmental services
  • Housing
  • Leisure facilities
  • Planning
  • Police
  • Refuse collection
  • Transport

It is up to individual councils to calculate the amount of Council Tax owed for each property and how the money is spent.

Who pays Council Tax?

In the majority of cases, the occupant of the premises is responsible for the payment of Council Tax however, the matter can become complicated when there are multiple people living inside the property.

The council will rely on the list below to assess who is liable for the payment of Council Tax: 

  1. A resident owner-occupier who owns either the leasehold or freehold of all or part of the property
  2. A resident tenant
  3. Someone who lives in the property and who is a licensee. This means that they are not a tenant, but have permission to stay there
  4. Any resident living in the property, this could be a squatter; and finally
  5. An owner of the property where no one is resident

What we can therefore say is that if a tenant rents a property in its entirety IE. They are resident and occupy the entire property, then the tenant is liable to pay the Council Tax. An example of this would be a family who rent a home to live in where their tenancy agreement entitles them to occupy the entire house. 

Who pays Council Tax where the property is shared by multiple tenants E.G. a HMO? 

As a general principle, the residents of a dwelling are liable for Council Tax. However, Council Tax legislation allows for certain circumstances where the owner is liable for the charge rather than the tenants. One such case is where the property is deemed a House in Multiple Occupation (HMO). 

The regulation that deems a property a HMO is as follows: – 

A dwelling which was originally constructed or subsequently adapted for occupation by persons who do not constitute a single household. 

For a property to be classed as a HMO, it must be established that no individual tenant is responsible for the rent of the property as a whole, or if there is more than one tenant that they do not hold a joint tenancy agreement that makes them joint and severally liable for the rent on the property as a whole. This means, if the tenants are on separate tenancy agreements and not a joint tenancy agreement, the Landlord is responsible for the payment of Council Tax. In such cases, the Landlord may factor the cost of Council Tax within the rental payment however, the responsibility ultimately rests with the Landlord to pay the Council Tax. 

Are there variations to the amount of Council Tax that a tenant needs to pay? 

If you are renting a property and you (and your housemates) are liable to pay Council Tax, there can be certain situations where the amount owed can vary. Here is a brief list containing some examples: 

  • You live alone. You can apply to your local council for a discount. If approved, you could be eligible for a discount of up to 25% regardless of your financial circumstances.
  • A full time student. Generally, full time students are exempt from paying Council Tax. See your student union and apply for a Council Tax Exemption Certificate.
  • A working professional living with a full time student. Assuming the full time student has been granted a Council Tax Exemption Certificate, the working professional tenant may apply to the local council for a 25% discount on their Council Tax liability.
  • A full time student living with 2 (or more) working professionals. Assuming the tenants are liable for Council Tax, the 25% that a single working professional would be entitled to no longer applies and the full undiscounted rate of Council Tax applies however, the full time student would still enjoy the benefit of their Council Tax Exemption Certificate 

The topic of Council Tax liability is a complex one however, we hope that this article has provided some valuable insight for Tenants and Landlords alike.

Whether you are a Landlord looking to rent a home or HMO and need advice on Council Tax and finding tenants or a tenant looking to rent your next home, contact Nicholas Humphreys (Sheffield – Broomhill & Crookes) on 0114 470 4715 or send us an e-mail to and we will be happy to offer further assistance.

Our office is open 7 days a week from 8am to 8pm.