This blog will answer the question “Can council tax be included in my rent?” It will cover the circumstances when the council tax is to be paid by the tenant, and when by the landlord. It will explain all the nuances with respect to council tax and tenancy.

Can council tax be included in rent?

Yes, council tax can be included in your rent. If you live at rent, you are the one residing at that property, therefore you are responsible for paying council tax of the property. Depending upon your rent agreement, your council tax can be included in your rent. 

Paying council tax on rented property

The person upon whom the responsibility to pay council tax falls upon, in case of renting, is determined by a hierarchy of liability.

This hierarchy is as follows:

  1. First liability falls upon the resident owner-occupier who owns the freehold of all or any part of the property.
  1. In absence of one, the responsibility is that of the resident leaseholder of all or any part of the property, such as an owner-occupier who pays a ground rent.
  1. If there is no freeholder or leaseholder, council tax liability is that of the resident statutory tenant on an assured tenancy agreement, such as a council or private tenant.
  1. In absence of a tenant even, the liability is that of the resident who lives in the property, and is a licensee, that is, a person who is not a tenant but has permission to live there.
  1. If there is no licensee even, then any resident staying at the property, for example a squatter has to pay the council tax.
  1. As a last resort, if the property is not at all occupied by any resident, then the council tax liability falls upon the owner of the property who doesn’t live there.

If there are more than one residents at the same level, the council tax liability is shared equally among them. Husbands and wives, partners and joint owners are jointly liable.

This hierarchy does not apply to houses in multiple occupations.

If the whole property is rented out on a single tenancy agreement

Tenants who are renting the whole property on a joint tenancy agreement are regarded as having a joint council tax responsibility. These might be family, friends or simply strangers who ended up as signatories on the same contract.

If the property is rented out to several tenants on separate tenancy agreements

If the landlord has subdivided his property and rented it out to tenants who all have separate rental agreements, he becomes responsible for paying the council tax.

If your property is shared with others, who pays council tax depends on the type of tenancy agreement that exists.

If you are a student

For full-time students council tax is not included in rent. They are exempt from paying council tax. Whether they live in university halls of residence or rent a house, they do not have to pay council tax. Part-time students, however, do have to pay it.

Conditions for persons qualified to be full time students are:

  • They should cover at least 24 weeks, over a whole academic year.
  • They should have at least 21 hours of weekly study during term time including tuition or work experience.
  • Students studying for a qualification up to A-level, under 20, must be on a course lasting for at least three months, with at least 12 hours of study per week.

For full-time postgraduate students also, council tax is not included in rent. They are completely exempt from council tax. In case of research students, they are often given a ‘writing-up’ period at the end of their programme, to prepare their thesis for submission. They are given exemption by some local councils and not by others.

Even if a student takes time off from studies, he will be exempt from council tax if he remains registered as a student and intends to go back to his studies.

In order to be exempted from council tax, a student needs to show proof of his student status. It should be a Certificate of Student Status. Some authorities also accept the student’s university student number and course details.

Landlord’s responsibility to inform

It is the landlord’s responsibility to inform the council of all tenancy changes within 21 days. This enables the council to provide an efficient service, send correct bills and award discounts and exemptions promptly.

Many local councils provide an online form to be filled by landlords in order to inform them.

For example, the Warwick District Council provides an online form for landlords and agents (such as a Letting Agent, Estate Agent, Housing Association) to inform it of any tenant moving in or out of a rental property.

If the landlords wish to register tenants from a retrospective period, he needs to provide full supporting evidence such as:

  • Dated tenancy agreements signed by both the tenant and landlord
  • Proof  of rent paid, which may include
    • Utility bills
  • Tenants’  forwarding address and contact details
  • Employment  details

When landlord is responsible for paying council tax

Council tax is not always included in rent. Many times, it is the landlord who is responsible. 

If there are no tenants in residence, the landlord becomes responsible for paying the council tax bill.

House in multiple occupation (HMO)

An HMO is a house or flat that has been built or changed for living in by one or more people who are not part of the same household. For example, where the rooms have individual locks on the doors,bedsits, homes shared by people who aren’t related to each other, halls of residence and hostels.

If each occupant of an HMO pays rent separately or occupies only a part of the property, the property is classed as a house in multiple occupation. 

Following are the conditions where the responsibility of paying council tax falls upon the landlord:

  • The property is an HMO, where multiple tenants rent their own private rooms, but share communal areas like the kitchen and bathroom.
  • The occupant / occupants are under 18
  • The occupants are asylum seekers
  • The occupants are staying temporarily and have another home somewhere else, such as when the rental property has been rendered uninhabitable and you’re transferred into a temporary home by your landlord.
  • The property is a care home, hospital or refuge of some kind.

If your living conditions are any of the above, you are not liable to pay council tax. It must be paid by the property owner, but it’s price may in some occasions be proportionally calculated into the cost of your accommodation.

Council tax liabilities

To easily summarise the above mentioned conditions, Council Tax liabilities are:

  • The landlord in a property which is an HMO
  • The landlord a property where you just rent a part
  • The tenant in a property where you are a sole tenant
  • The joint tenants in a property where you are a joint tenant

The task of assigning correct council tax liabilities falls upon the local authority. If it determines that the Council tax liability is in the wrong name then you could receive a large backdated demand for making the payment.

Council tax discounts on rented property

Many people are either exempt from paying council tax or are eligible to pay it at a discounted rate. For example, a single person occupying a whole house or flat receives a 25% discount. Most full-time students and all members of the armed forces are examples of individuals who are entirely exempt from the charge. Find out more about who has to pay council tax.

Landlords of HMO’s should take advantage of this and check their tenants’ employment status. For example, suppose one tenant is a full-time student, one a private in the army, and one a young professional. The student and the private are exempt from paying council tax, making the young professional the sole adult in the property, entitling the landlord to a 25% discount on the council tax bill.

Landlord’s liability for unpaid council tax 

Where the council tax of a rented property was included in the rent, but the tenant has left it unpaid, the question of liability arises.

As long as the tenancy agreement requires the council tax to be paid by the tenants, any unpaid debts when the tenants leave are not the landlord’s responsibility.

It is important for the landlords to specify who is responsible for paying council tax in the tenancy agreement and budget for the cost of paying this tax between tenancies.

Landlords of HMO’s who are responsible for paying council tax should:

  • Include the cost of council tax in the rent agreement to recoup the cost, and
  • Check the employment status of the tenants where an exemption is applicable.

Precautions for a tenant

When you’re looking at moving into a rented property, it’s important that you make sure you’ll be able to afford all of the other bills that come with living on your own. That’s why it’s important to find out whether any other expenses, such as council tax are included in the rent or not.

Generally, most landlords require you to pay your council tax separately from the rent as this payment goes to the council. However, there are a few cases where council tax can be included in your rent payment.

It is your duty as a tenant to collect all information before renting a property.

In order for that, you can do the following:

  • The first and best approach is to talk to the landlord for details.
  • If you’ve already moved into the property already, you can check your rental contract to see if any bills are included in the rent.

Many times, the landlord includes the council tax in your rent, such as if you’re living in a shared property, or when the landlord wants to pay the council tax bill himself rather than getting the tenants to organise setting it up.

Social or council housing

If you live in a council house or a property in a social housing project, your council tax is usually included in your rent but. The reason behind this is that your rent is usually paid directly to your landlord through your Housing Benefit so it is easier to make both payments as one.

If your benefits have been moved to Universal Credit, your situation might be slightly different. Although your Housing Benefit is paid to you instead of your landlord as part of your Universal Credit, your Council Tax Support is separate from this as it comes directly off your council tax payments – it’s not a benefit that’s paid to you.

Tenancy agreements and council tax liability

A tenancy agreement can be considered for Council Tax liability purposes to determine council tax liability. However, if there are any terms in the agreement which go against legislation, those will be ignored by the Local Authority.

Any tenancy agreement which also includes an agreement from the landlord to pay the local authority on your behalf should also be considered very carefully.

If the agreement states that the landlord will pass money to the Local Authority for a property on which they are liable, but the landlord fails to pay monies to the Local Authority, the correct liable party still is the tenant and he is the one who gets the court summons, not the landlord.

If the tenant has a tenancy agreement that states that his council tax payments are included in his rent it is still, who shall be made liable for council tax as he is the occupier of the property. The liability always remains in the name of the tenants if the rules says so.

Conclusion

This blog answered the question “Can council tax be included in my rent?” It covered the circumstances when the council tax is to be paid by the tenant, and when by the landlord. It explained all the nuances with respect to council tax and tenancy.

FAQs

Is council tax included in private rent?

Generally, council tax is not included in your rent. You have to pay it separately. It depends on your rent agreement.

Can the landlord claim council tax?

Yes, landlords can claim the expenses included in a council tax such as those of running water, maintaining property, etc., which reduces your tax bill.

Is council tax split between occupants?

Council tax is split if the property has been rented to multiple occupants separately, with different rent agreements. But, if you are jointly occupying a property and are joint council tax payers, your council tax bills cannot be split.

Who is liable for council tax in a rented property?

It is the tenant who is responsible for paying council tax for the property he occupies. For an empty property, it is the owner who pays council tax.

Citations 

https://about.movebubble.com/renterhub/heres-what-you-need-to-know-about-council-tax-if-youre-renting
https://www.gov.uk/rent-room-in-your-home/rent-bills-and-tax
https://www.thinkmoney.co.uk/blog/is-council-tax-included-in-my-rent/
https://www.pettyson.co.uk/about-us/our-blog/582-who-pays-council-tax-renting
https://www.cambridge.gov.uk/who-pays-council-tax
https://myurbanjungle.com/explore/blog/do-you-pay-council-tax-if-you-rent/
https://www.propertyreporter.co.uk/landlords/e-renters-guide-to-council-tax.html
https://www.newham.gov.uk/council-tax/pay-council-tax/5
https://www.oxford.gov.uk/info/20008/council_tax/160/council_tax_information_for_landlords
https://www.newcastle.gov.uk/services/council-tax/how-pay-your-council-tax/council-tax-who-has-pay

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.