WHO PAYS PROPERTY TAX ON RENTED PROPERTIES?

Who Pays Property Tax on Rented Properties?

Who Pays Property Tax on Rented Properties?

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Understanding who is responsible for paying property tax on rented properties is crucial for both landlords and tenants. This blog aims to clarify this often confusing aspect of renting and provide guidance on navigating property tax obligations.

In most cases, tenants are responsible for paying council tax on the property they rent.

Council tax is a local tax levied on domestic properties in the UK to fund essential services provided by local authorities. The amount payable depends on the property's value and its designated council tax band. However, there are exceptions to this general rule:


  1. Houses in Multiple Occupation (HMOs):
    If the property is classified as an HMO, the landlord is responsible for paying council tax. This applies even if tenants have separate tenancy agreements.

  2. Vacant Properties:
    When a property is unoccupied and unfurnished, the landlord becomes liable for council tax payments. This includes periods between tenancies or during renovations.

  3. Major Renovations:
    If a property is undergoing significant renovations or structural changes, making it uninhabitable, the landlord may be responsible for council tax during this period.

  4. Furnished Holiday Lettings (FHLs):
    For properties classified as FHLs, landlords may be liable for council tax payments, though rules can vary between local authorities.


It's important to note that certain circumstances may qualify a property for council tax exemptions or discounts:

  • Student Accommodation: Full-time students may be eligible for council tax exemption or discounts.

  • Single Occupancy: A 25% discount may apply if only one adult lives in the property.

  • Low-Income Households: Some local authorities offer reductions or support schemes for low-income residents.

  • Disabled Adaptations: Properties with specific adaptations for disabled residents may qualify for discounts.


To ensure clarity and avoid disputes, both landlords and tenants should:

  1. Clearly define responsibilities in the tenancy agreement.

  2. Stay informed about current regulations and any changes.

  3. Promptly notify the local council of any changes in occupancy or property status.

  4. Keep accurate records of council tax payments and communications.

  5. Understand available exemptions and discounts.


For tenants, it's crucial to:

  1. Obtain and review the council tax bill for the property.

  2. Pay council tax on time to avoid penalties.

  3. Check for applicable discounts or exemptions.

  4. Inform the council of any changes in living situation.

  5. Maintain proof of payments.


If there's uncertainty about council tax liability, it's advisable to:

  1. Review the tenancy agreement for specific clauses related to council tax.

  2. Communicate with the landlord to clarify responsibilities.

  3. Contact the local council for guidance on the specific property and circumstances.


By understanding these guidelines and maintaining clear communication, both landlords and tenants can ensure a smooth experience regarding council tax on rented properties. Remember, staying informed and proactive is key to avoiding misunderstandings and potential legal issues related to property tax obligations.

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