Council tax is generally paid on a monthly basis to council authorities in lieu of the community services that they provide to their residents which include roads, streetlights, garbage collection, schools, parks and hospitals. Through this blog post, we will discuss how much council tax is due on residents of a studio flat. Subsequently, we will also discuss how council tax rates are applied, who can avail of a discount on their council tax and how one can pay their bills.

How Much Council Tax Should I Pay For A Studio Flat?

The amount of council tax due upon a studio flat depends on the council tax band that is assigned to the property. The Valuation Office Agency (VOA) initially assesses the market value of properties according to their worth in 1991 (this is a uniform practice across the UK) to assign them a valuation band. This valuation band forms the basis for a council tax rate to be applied to the premises.

There are eight bands that run across A to H, with Band A assigned to properties with the lowest value and increasing up to Band H for properties with higher values. It is on the basis of this assigned band, that the amount of council tax is decided. Therefore, the higher the valuation band, the higher the council tax payments.

Below is a detailed classification of council tax rates according to their valuation bands:

Council Tax BandProperty Value
AUp to £40,000
BOver £44,000 and up to £52,000
COver £52,000 and up to £68,000
DOver £68,000 and up to £88,000
EOver £88,000 and up to £120,000
FOver £120,000 and up to £160,000
GOver £160,000 and up to £320,000
HOver £320,000 

In addition to a property’s value, the Valuation Office Agency considers the following factors when assessing a property for valuation purposes:

  • location
  • size
  • character
  • layout
  • purpose or use

Is Council Tax Included In Rent?

No, as a general rule for sole tenants, council tax is not included in rent and is charged separately and directly by local council authorities. In the case of rare exceptions when a landlord includes the council tax in the tenant’s rent, you must be careful about it being mentioned in the tenancy agreement as well as gathering evidence of timely payments to local authorities. In the case of unpaid council tax, the authorities will question the tenant (and not the landlord) as they are liable to pay council tax.

However, in case a property is occupied by multiple tenants at the same time or you are renting only a specific part of the house, it is best for council tax to be included in the rent as being a joint tenant, one individual cannot be held liable for council tax payments. In such cases, the council tax bill will also be addressed to the landlord’s name and not the tenants’.

If someone lives in a council house or social housing project, it may be practical and advisable to have their council tax added along with their rental payments. The reason for this is the fact that in most cases where council/social housing tenants are receiving Housing Benefit to make rental payments and those payments are being paid directly by the DWP to the tenants’ landlords, it may be convenient to have council tax added in the rent. 

Who Is Liable To Pay Council Tax?

Council tax bills are sent in the name of the person who is registered as the one ”liable” for such bills. This means that even if someone is living with their parents they are not responsible for making council tax payments if they are not considered to be liable for them by the local council office.

Council tax becomes payable upon those who fall under the hierarchy of liability; which looks something like this:

  • at the top of the hierarchy is the resident who owns either the leasehold or freehold of the property;
  • the second in line is a resident tenant;
  • this is followed by a resident who is not a tenant but lives on the property;
  • then comes any resident occupying the property;
  • and finally, the owner of the property while it remains unoccupied

Do You Have To Pay Council Tax Every Month?

Yes, council tax bills are paid through monthly instalments that range from the months of April to January.

Council tax is based upon the valuation band that a property is categorized under by the local council and Valuation Office Agency. While the local council may assign an annual bill in April, the annual tax is spread over 10 monthly instalments to make payments convenient for individuals as well as to account for any desirable changes such as inflation rates. 

If an individual is unable to afford their monthly council tax instalment or would require a relief, they may request to have the annual bill be spread over 12 monthly instalments versus the usual 10 instalments. This reduces the per month average due to which the due amount is decreased.  

In terms of mode of payment, local councils may accept weekly or fortnightly payments as well. Generally, a discount may be availed if the payee chooses to pay the entire annual tax bill in advance.

How Do I Pay My Council Tax Bills?

Direct Debit is the most convenient method of making council tax payments since the annual tax is split across 10 monthly instalments and the payment plan is shared by the local councils at beginning of the term in April.

While the instalments assigned by local councils are 10, individuals wishing to spread them over 12 months instead may apply to their local council office and request the same. Payments may also be made on an annual or half-yearly basis.

Although the instalments are due on the 1st of each month, individuals choosing to pay through direct debit may choose the 1st, 8th, 15th or 22nd.

When Do You Start Paying Council Tax After Buying A House?

You will start paying council tax on Completion Day after buying a house. Although the exchange of property may have taken place much earlier than this, you will not be liable to pay council tax during this time.

The most ideal way to proceed with getting registered for council tax payments is to apply on the council website and mention your Completion Day at least two weeks in advance. However, it also depends on the builder of the property as to the dates indicated regarding completion day and the Valuation Office Agency’s assessment of your property for the council tax band to be assigned.

In certain cases, it may be so that you are paying council tax at your previous house while also paying it for the new house due to overlapping dates during a month. If your council makes provision for a Second Home Discount, you may be able to avail of it on the new house until you move in completely. 

Council Tax bills are payable from the start of the financial year in April with 10 monthly instalments concluding in January. While councils maintain February and March as tax-free months to collect payments that were not made in time; those liable to pay council tax bills may request their local council for 12-month instalments to make payments convenient by reducing the amount of each instalment.

Who Is Eligible For Council Tax Benefits?

To qualify for a council tax benefit certain criteria need to be met. Following are some examples: 

  • Two adults who live in the same house qualify to pay full council tax; they may share the bill. However, if a single adult is living on a property by themselves, they may be eligible for a 25 per cent reduction in the bill irrespective of the fact whether they are part-time employees or full-time ones. The same rule applies if an adult is sharing the premises with one or more individuals under the age of 18 years.
  • A 50 per cent council tax benefit becomes applicable if all the residents of the household are under 18 years of age. Complete exemption or a 100 per cent discount is applicable if all the residents of the said premises are full-time students.
  • Individuals on a low income or those receiving other forms of public support qualify for a 100 per cent discount on their council tax bills. To apply for this exemption, claimants may be homeowners or tenants; they may either be unemployed or working. 

Conclusion:

The discussion above makes it clear the amount due for a council tax bill on a studio flat depends on the market value assigned to the property and the consequent council tax band that applies to it. Band A is the lowest council tax band assigned to properties worth £40,000 while Band H is the highest band that applies to properties worth more than £320,000.

FAQs: How Much Council Tax Should I Pay For A Studio Flat?

Does a studio flat count as 1 bedroom?

No, a studio flat is different from a 1 bedroom space as it is a self-contained area which comprises of a living area along with a kitchen and bedroom all within the same premises, except for a separate bathroom. A one-bedroom flat will have a separate bedroom with an individual living and cooking area.

Is it worth buying a studio flat?

Even if you do not intend to live ina studio flat yourself, they are generally considered a good buy for investors as they are low in cost and usually high in demand by tenants.

How is council tax calculated?

Council tax is calculated on the basis of the market value of your property and the band that is assigned to them as a result of the valuation. This means that low-cost properties have a lower council tax bill and it continues to increase with a rise in property value.

What months don’t you pay council tax?

Council tax is an annual tax spread over 10 months; with each new term starting in April and ending in January. No payments are to be made in February and March. However, if someone requests for their local council to make their council tax payments based on 12 instalments than 10, they will make payments every month of the year. 

What happens if you don’t pay council tax?

If someone is unable to pay their council tax, the local council will send them an official notice asking them to clear their dues in the next 7 days. Should they not be able to make up for the missed payment, residents may be asked to pay council tax for the entire year ahead. Two such reminders may be sent by the council to encourage council tax payments. However, if the resident does not clear their arrears even after receiving the final notice from their local council, severe legal action may be taken such as possession of valuables, eviction, or even prison. 

References:

Studio flat – council tax/ TV licence? in The AnswerBank: Home & Garden

Cost of living, studio flat. Council tax? — MoneySavingExpert Forum

Council Tax After Buying A House | First Time Buyer Help.

Is Council Tax Included In Your Rent?

Is council tax included in my rent? | thinkmoney

Are You Responsible For Paying Council Tax?

Council Tax: Who has to pay

Paying council tax

Council tax exemptions

Council Tax Reduction – Who can apply?

Citizens Advice

What was missing from this post which could have made it better?

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.