Who is liable for Council Tax?

28 Apr 2014

There is sometimes uncertainly and confusion about whether the landlord or the tenant is responsible for paying Council Tax. Section 6(2) of the Local Government Finance Act 1992 says:

(1)  The person who is liable to pay council tax in respect of any chargeable dwelling is the person who falls within the first paragraph of subsection (2) below to apply, taking paragraph (a) of that subsection first, paragraph (b) next, and so on.

(2)  A person falls within this subsection in relation to any chargeable dwelling and

(a)  he is a resident of the dwelling and has a freehold interest in the whole or any part of it;
(b)  he is such a resident and has a leasehold interest in the whole or any part of the dwelling which is not inferior to another such interest held by another such resident;
(c)  he is both such a resident and a statutory, secure or introductory tenant of the whole or any part of the dwelling;
(d)  he is such a resident and has a contractual licence to occupy the whole or any part of the dwelling;
(e)  he is such a resident; or
(f)  he is the owner of the dwelling.

Local authorities will therefore first see if there is someone who falls into para (a), and if not will move onto para (b) and so on.

This means that where the owner of the freehold interest (the Landlord) is no longer a resident of the property and has entered into a tenancy or created a licence with another party who is resident of the property i.e. there is someone who falls into one of categories a-e above, the owner/landlord will no longer be responsible for the payment of council tax.

In Section 6(5) ‘owner’ is defined as a person having a material interest in the whole or any part of the premises. Section 6(6) further defines ‘material interest’ as being either a freehold interest or a leasehold interest which is granted for six months or more. Therefore the “owner” for the purpose of this section can mean not only the owner of the freehold interest but also in some cases the tenant.