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Who Pays Council Tax in Rented Properties?

As the private rental sector looks to reaffirm the financial stability seen prior to the COVID pandemic, approximately half a million households are still coping with rent arrears. With the average cost of renting only climbing alongside unrelenting demand, alongside an eyewatering £87.2 million still yet to be paid in council tax for the last financial year we clear up common questions about council tax in rented properties.  

Who Pays Council Tax in Rented Properties? PropertyLoop

Who Pays Council Tax on a Rented Property?  

Commonly when determining which party is liable to pay council tax on a property renters are encouraged to check the terms of the tenancy agreement. This contract will outline whether or not the occupants of the property should be covering this expense, or if it is included within the amount they pay towards rent.  

The occupant’s duty to pay off the council tax can become a grey area if there are numerous tenants residing within the rental, under which circumstance a hierarchy of liability must be followed. This structure places those that own the property at the top, with resident tenants, those with permission to reside within the property and residents all following.  

Do Landlords Pay Council Tax for Students? 

It is worth noting that if a rental property is exclusively occupied by full-time students, then it will be considered exempt from council tax payments. In order for the occupants of the property to be considered full-time students their course must span across an entire academic year or a minimum, of 24 weeks; alongside 21 hours of study each week. In order to validate the exemption from paying council tax the occupants will need to provide documentation from the university that proves their student status. It is important for owners to note that if all the occupants of their rental opportunity are full-time students it is the property that is considered exempt from paying council tax, therefore meaning the owner will also be relinquished from this financial obligation.  

What Bills Do You Have to Pay When Renting?  PropertyLoop

What Bills Do You Have to Pay When Renting? 

Whilst many of those that choose to live in rented accommodation will understand that perhaps their greatest and most significant monthly expenditure will be the sums they are expected to provide to the landlord for rent. However, it goes without saying that this will not be the only expense that the occupants of a rental property will have to forgo, with the running costs that come with a rental quickly adding up.  

Alongside rent, occupants could be expected to pay for utilities such as gas, electricity, water and broadband services. Tenants should ensure that they provide a meter reading to each of their suppliers on the day they move into the property, and on the last day of their occupation, as this will prevent them from being billed for new tenant’s usage. It is also worth noting that tenants are under no obligation to remain with the utility provider currently supplying the rental property and that they are free to shop around to find the best deal. With this being said this may not always be the case, requiring tenants to assess the tenancy agreement to see if utilities are included in their monthly rent as is sometimes the case.  

Who Pays the Council Tax if a Tenant Leaves Early? 

Similarly to a tenant’s obligation to consistently pay the agreed-upon amount of rent each month, simply leaving the property will not absolve them of their responsibility to also pay council tax. This means that if the occupants of a property abandon the rental without informing the owner, then the landlord will not suddenly be held responsible for any council tax payments.  

With this being said it is essential for owners to note that they must have a written and signed tenancy agreement to provide to their local authority in order to show the tenant’s liability for the council tax payment during the fixed period.  

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Is Council Tax Included in Rent? 

In most cases it is uncommon for a landlord to include council tax in the amount a tenant is expected to pay each month in rent. This is because as the owner of the property is not expected to make these payments to the local authority, bills for council tax will be directed to the tenants and not the owner, making the sums difficult to incorporate into the amount they pay in rent. With this being said if the rental property in question is considered to be a house in multiple occupation or HMO, the landlord will be liable for the tax payments, typically seeing them include this fee in rent allowing them to recuperate the cost.  

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