Who Pays Council Tax On Rented Property In London?

Council tax is a local charge which pays for the services provided by your council. Rates are set locally and vary depending on your property’s value band. For example, in the London Borough of Redbridge, the current annual charge for an average band D property is £2,089.87. In Hackney, the council tax rate for band D properties is £1,877.37.

Council tax rates are regularly adjusted and you can find the latest rates on your local council’s website.

Do Landlords Pay Council Tax?

Council tax must be paid for all UK properties by occupants aged 18 or over. Usually, the person living in the property must pay the tax, not a non-resident landlord.

However, there are some exceptions. We look at what landlords should know about who pays council tax on a rented property.

What Is Council Tax?

Residents across the UK are each expected to pay for the services they use within their local council area. This ranges from bin collection to schooling and providing services for children, the elderly and the disadvantaged. Other statutory services, such as policing and community care, are also part-funded from council tax.

Council tax has been around for nearly three decades now. Residents pay a rate based on the value of their property. Homes in England were last valued in 1991 and placed within different valuation groupings – H being the lowest and A being the highest. For new properties, an estimate by the Valuation Office Agency of what it would have been valued at.

Falling local authority revenues due to cutbacks from central government mean that councils often need to adjust the rates charged to council tax paying residents. That way they can provide the services their electorate expect. Not paying council tax can lead to a court summons to recover the amount owed plus costs.

How Much Is My Council Tax?

Council tax levels are set in March each year, and bills are sent to residents. It can be paid in one lump sum or by direct debit in 10 instalments. As we’ve said, the amount you pay depends upon which council tax band your home was placed in when properties were first valued in the 1990s.

For example, this is the cost of council tax in the London borough of Redbridge for 2023/24. Visit any local authority website to find out the council tax rates for the borough.

Redbridge Council Tax Bands And Charges For 2023/24

Amounts are the average council tax calculated across Redbridge and do not take into account parish precepts where applicable.

Looking at the above table, the monthly council tax payment due for each property in a particular band works out as follows:

• Band A – £116.10
• Band B – £135.45
• Band C – £154.81
• Band D – £174.16
• Band E – £212.86
• Band F – £251.56
• Band G – £290.26
• Band H – £348.31

Who Pays Council Tax – Tenant Or Landlord?

The tenant will most likely be liable for paying the council tax bill. If there is only one person living in the house, aged 18 or over, then this individual is due to pay the tax. If two or more people live in the property, they are jointly liable for the bill.

The landlord is only liable for council tax if the property is empty or if nobody aged 18 or over lives there.

When Is The Landlord Responsible For Council Tax?

As a landlord, it is essential to understand your responsibilities for paying council tax to avoid a court summons if the council tax bill is not paid. There are occasions when the person who owns the property has to pay the bill.

When individuals rent rooms in a shared tenancy and occupy only part of the property, which we refer to as a House of Multiple Occupation (HMO), the landlord will pay the council tax bill but divide it by how many rooms there are and increase the rent by this sum. Individuals who have been rehoused as an emergency, such as asylum seekers, are exempt from paying council tax.

Do Landlords Pay Council Tax When Property is Empty​?

An absence of tenants doesn’t mean that you don’t have to pay council tax. You may be asked to pay a portion of it – or all of it. At one point, landlords were given a 50 per cent reduction for an empty property, but since then, the government has cracked down on properties which are lying empty.

Landlords now have to pay full council tax and for empty properties that are vacant for more than two years, an additional 100% premium can be applied by the local authority.

When Are Landlords Exempt From Council Tax?

If a property is undergoing major repairs or structural alterations, the landlord may be able to apply for council tax exemption. Typically, exemption due to repair work is up to a maximum of 12 months and exemption is at the discretion of the local authority.

Even in the case where your property does not qualify for exemption, there may be discounts available for unoccupied and unfurnished properties, so it is worth checking with your local council.

How To Pay Council Tax

Council tax payments are usually split into 10 monthly instalments, although you can opt to pay in 12 instalments if that is easier. There are a few different payment options for council tax:

• Direct Debit – Most UK councils prefer to collect council tax payments via direct debit. That’s because it’s both simpler and quicker for most residents with a bank account. Paying this way allows you to hand over a certain amount every month rather than paying the bill all at once or quarterly. It also means you can arrange the payment date so that it doesn’t coincide with another large sum leaving your account, such as a regular mortgage or car payment.
• Online banking – When you receive your council tax bill for the year, it should include the council’s online banking details and your council tax account number, so that you can make the payment via your online bank account.
• Over the phone – You will find your local council’s card payment telephone number either on your bill or on their website. You can pay your bill by Visa, Visa Debit and MasterCard over the phone.
• Post office or PayPoint – Some local councils also provide the option to pay in-person at a post office or a shop that has PayPoint. You would need the bar code on your paper bill to pay using these methods. PayPoint only accepts cash payments, while the post office also accepts cheque and card payments.
• Bailiffs – If paying off a council tax bill that has been in arrears and resulted in a visit by a bailiff, it’s possible to pay the bailiff directly rather than via the council.

Do You Have To Pay Full Council Tax?

There are some circumstances where council tax discounts and exemptions apply. Individuals who live on their own are entitled to a 25% discount on their council tax bill. Students in full-time education don’t have to pay the tax at all.

Other individuals who are considered exempt include:

• Non adults
• The majority of apprentices
• Teenagers who are adults but in full-time education
• Students who are sitting a full-time HNC/HND course, under-graduates, post-graduates or studying for a PHD
• Young people on other full-time government-funded schemes
• Those in nursing training
• British Council-registered language tutors from abroad
• Those who are mentally incapable
• Individuals with learning difficulties
• A carer who lives with another individual not related to them or whom they are in a relationship with
• A foreign ambassador in a ministerial capacity
• Hospital patients
• Prisoners
• Care home resident
• Member of visiting army, navy, airforce etc
• Resident of a hostel
• Someone living in a religious community

In Redbridge, council tax discounts are also available for individuals who are registered disabled. You can apply if you are disabled or there is another individual living in the property who is disabled. This can be a child or an adult, but there must be at least one disabled individual resident there.

In order to access the discount, it is necessary to show that there is additional household provision for the disabled person in the form of an extra bathroom or some other space that is necessary for them to live there. Or, it could be that the property has had to be widened or adapted to accommodate a wheelchair.

If you are still unsure, it’s best to contact the relevant local authority to check. For Redbridge, tel: 020 8708 5670 or download the application form (PDF 116KB). You will need a signature from a social worker or health professional.

Council Tax Discounts For Low Income Households and Foster Carers

In Redbridge, since the 1 April 2020, registered foster carers receive a twice-yearly bonus payment up to the value of 80% of the council tax they have paid in the previous six months.

Young people leaving local authority care are exempt from paying council tax until they turn 25.

People paying council tax who are on a low income may also be eligible for a reduction at Redbridge Council. In addition, pensioners who live with another adult who is not a partner may also be eligible for a Second Adult Rebate reduction.

The scheme is based on the amount of income coming into the property and the number of individuals (adults and children) residing there. The cut-off threshold for household capital is £16,000. In other words, if you have more than this in savings, then you won’t qualify for this reduction. More information on this can be accessed via the council’s website.

Council Tax For Landlords: A Summary

• It’s always a good idea to be upfront and let your tenants know that they will be responsible for the council tax, and include the details on the tenancy agreement so tenants are clear about who pays for the council tax.
• Landlords of Houses of Multiple Occupations (HMOs), where there are individual tenancy agreements, should add the cost of the council tax bill to the room rental price.
• All your tenants may be full-time students, in which case no tax will be due.
• Remember, the landlord is responsible for paying the council tax in void periods.
• It’s worth finding out what the council tax discounts are where your rented flat or house is located.
• As a landlord, you (or your letting agent) must let the council know every time the tenancy in your buy-to-let property changes (this doesn’t apply to HMO room rentals since the council tax is a landlord’s responsibility).

For more information on any of the above, then please contact us today; here at Sandra Davidson we are always keen to help clear up any doubts for clients – both landlords and tenants. We cover areas such as Silvertown, Collier Row and Ilford, so if you have any questions about properties in East London, get in touch.