Who is liable?

Council Tax usually has to be paid by one of the adults living in a ‘dwelling’. This is called ‘liability’. The word dwelling can mean:

• a house
• a flat
• a bungalow
• a maisonette
• a mobile home
• a houseboat.

(Any properties that are kept for occasional or holiday use may receive a discount or exemption. Your local council will make a decision on this on a case by case basis. See Empty property for more information.)

If your house is split so that it has separate self-contained living accommodation (sometimes called an annexe or granny flat) this will normally be counted as a separate dwelling. However, if a relative who is either aged 65 or over or who is disabled lives in the annexe, no separate Council Tax is due. If the annexe is empty, and can’t be let separately, then there is no Council Tax charge.

Usually it is clear which of the adults living in a dwelling has to pay the Council Tax: for example, if you own your home and live there by yourself or with your family then you are liable. If you live in a rented flat as a tenant, then you are liable. Even if you live in a property without being an owner or a tenant you are still normally liable for the Council Tax.

Sometimes it is not so clear who is liable. If the owner lives in the dwelling, then they are liable even if there are tenants or other residents living there too. If a tenant has a lodger, then the tenant is liable, not the lodger. If a number of different people live in a dwelling, there is a process for working out who is liable. This is called the ‘hierarchy of liability’. The first relevant person you come to as you go down the list is liable:

England and Wales

• a resident who owns the freehold
• a resident who owns the leasehold
• a resident tenant
• a resident who is not a tenant but has permission to stay there
• any other resident, for example a squatter
• an owner of the property who doesn’t live there.

Scotland

• a resident who owns all or part of the property
• a resident who is a tenant of all or part of the property
• a resident who is a statutory, statutory assured or secure tenant of all or part of the property
• a resident who is a sub-tenant of all or part of the property
• any other resident, for example, a squatter
• an owner of any part of the property who doesn’t live there, unless there is a non-resident tenant or sub-tenant who has a lease for six months or more.

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It is up to the person who is liable, how and if they charge other people in the home for their share of the tax. If there are joint owners or joint tenants, then they will both be liable for Council Tax. This means that either of them can be sent a bill or taken to court if they don’t pay it. But they will only get one bill and only have to pay the tax once between them.

There is a special rule about the liability of husbands and wives, registered civil partners and couples living together as if they were husband and wife or civil partners. Even if only one of them is the owner or tenant, the other is still liable for the Council Tax. So if your partner doesn’t pay, you will have to.

Example John Wiles owns his home. His daughter Jane and her two young children come to live with him and Jane pays him rent.

Who is liable for the Council Tax?

John is liable for the Council Tax as he is the owner and lives in the property. He can ask Jane for a share of it if he wants to.

Some residents are not liable to pay Council Tax. They include:

• people in care homes
• people who live in accommodation, such as bedsits, where rent is paid for separate rooms rather than for self contained flats
• domestic staff living in accommodation owned by their employer, monks, nuns and members of religious orders and ministers who live in a home where they also work.
  

These people don’t have to pay Council Tax. The owner is liable to pay it, unless they pass responsibility to the resident using formal procedures.

When are you liable?

Council Tax is a daily tax. Although the amount is usually quoted for a full year it is, in fact, due each day at 1/365th of that amount. So if you move from one property to another you are charged Council Tax daily for the old property until the day before you move out. You are charged Council Tax for the new property from the day you move in.

Similarly, any discounts are also calculated daily.

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Empty property

If no one lives in a property as their main home, then the owner (or the leaseholder) is normally liable to pay Council Tax. But you will get a discount of at least ten per cent off the Council Tax due on an unoccupied dwelling, or second home.
No Council Tax is due on an empty dwelling belonging to:

• a person in hospital or in a care home
• a person who has gone to live elsewhere to give personal care to someone else who is old or ill or disabled
• a person who has gone to live elsewhere to receive personal care from someone else because they are old or ill or disabled
• a person in prison (unless they are there because they have not paid their Council Tax).

You don’t have to get any particular benefit to qualify as ill or disabled.

Empty property which has been repossessed by a bank or building society is exempt from Council Tax. Property which is left empty and unfurnished is exempt from Council Tax for six months. So people who have moved will not have to pay tax on two properties unless it takes more than six months to sell the first one. After someone dies, their property is exempt from Council Tax from the date they die until six months after the will has been settled. Also, a property which is empty because it needs major repairs or alterations to make it habitable is also exempt. This exemption applies for a maximum of 12 months whether the work is actually finished or not by then.

Example Joan Broadhurst lives at 35 Acacia Avenue in Billericay. On 6 August 2007 her sister Maisie dies, leaving Joan her bungalow in Pontefract. It takes five months to sort out the will. Maisie had paid her Council Tax in advance for the whole of 2007–2008 and the council refunds the excess from 7 August 2007 to 31 March 2008 to the estate. Six months later the bungalow is finally sold. No Council Tax is due on the empty property for that whole period.

In the year 2008 Joan herself is 80 and goes to live in Leafy Glade care home. She does not sell her own house as she hopes one day she may return there. As soon as she leaves the house no Council Tax is due. Joan had paid it in advance, so she can claim a refund up to the end of the year. She is not liable to pay any Council Tax in her care home.

Anyone who thinks their property should be exempt from Council Tax should contact their local council.