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Your Council Tax bill explained

What is council tax?

Council tax is a system of local taxation collected by local authorities. It is a tax on domestic property. Some property is exempt from council tax. Some people do not have to pay council tax and some people get a discount.

Properties exempt from Council Tax

Some property is exempt from council tax altogether. It may be exempt for only a short period, for example, six months, or indefinitely.

Properties which may be exempt include:

  • Condemned property
  • Property which has been legally re-possessed by a mortgage lender
  • Property unoccupied because the person who lived there now lives elsewhere because they need to be cared for, for example, in hospital, in a care home or with relatives
  • Property which is unoccupied because the person who lived there has gone to care for someone else
  • Any property that only students or foreign language assistants on the official british council programme live in. This may be a hall of residence, or a house. If the property is occupied by both students and non-students the property is not exempt but any students in the house are disregarded
  • A holiday caravan or boat if it’s on a property where council tax is paid
  • A property where all the people who live in it are aged under 18
  • Property which is occupied only by people with severe mental impairment
  • A self-contained ‘granny flat’ where the person who lives in it is a dependent relative of the owner of the main property.

Who has to pay Council Tax?

Usually one person, called the liable person, is liable to pay council tax. Nobody under the age of 18 can be a liable person. Couples living together will both be jointly and severally liable, even if there is only one name on the bill. This applies whether the couple is married, cohabiting or in a civil partnership. No one is under an obligation to make a payment until they are issued with a bill in their name or, if they are jointly and severally liable, with a joint taxpayers’ notice.

Usually, the person living in a property will be the liable person, but sometimes it will be the owner of the property who will be liable to pay.

The owner will be liable if:

  • The property is in multiple occupation, for example, a house shared by a number of different households who all pay rent separately; or
  • The people who live in the property are all under the age of 18; or
  • The property is accommodation for asylum seekers; or
  • The people who are staying in the property are there temporarily and have their main homes somewhere else; or
  • The property is a care home, hospital, hostel or women’s refuge.

If only one person lives in a property they will be the liable person. If more than one person lives there, a system called the hierarchy of liability is used to work out who is the liable person. The person at the top, or nearest to the top, of the hierarchy is the liable person. Two people at the same point of the hierarchy will both be liable.

The hierarchy of liability is:

  • A resident owner-occupier who owns either the leasehold or freehold of all or part of the property
  • A resident tenant
  • A resident who lives in the property and who is a licensee. This means that they are not a tenant, but have permission to stay there
  • Any resident living in the property, for example, a squatter
  • An owner of the property where no one is resident.

Properties exempt from Council Tax

Each year, every local authority will set a rate of council tax for each valuation band. Not everyone will have to pay the full amount of council tax. There are three ways in which your council tax bill may be reduced.

  • the reduction scheme for disabled people
  • discounts
  • Council Tax Reduction and second adult rebate.

Empty properties

A local authority can offer a discount of 100% or less, or even no discount at all, on a property which is:

  • Empty and substantially unfurnished. The reduction applies for a maximum of six months and the property has to be vacant for the whole of this period. This includes a caravan or boat which is used as main residence but which is unoccupied
  • Empty because it needs major repairs or alterations to make it habitable. The reduction applies for a maximum of 12 months whether the work is actually finished or not by then (although up to six weeks of occupation during the period is allowed). This includes a caravan or boat which is used as main residence but which is unoccupied.