Do Landlords Pay Council Tax?

At Towerstone Accountants we provide specialist property accountant services for property owners landlords and individuals dealing with council tax and property related charges across the UK. This article has been written to explain do landlords pay council tax in clear practical terms so you understand what applies to your situation. Our aim is to help you avoid confusion stay compliant and make informed decisions.

This is a very common question and one that causes a lot of confusion for both new and experienced landlords. The short answer is sometimes yes and sometimes no. Whether a landlord pays council tax depends on who is legally responsible for the property at a particular time, how the property is let and whether it is occupied or empty.

Council tax is not automatically the tenant’s responsibility and it is not automatically the landlord’s responsibility either. Liability follows a set of legal rules and understanding them properly helps avoid disputes arrears and unexpected bills.

In this guide I will explain clearly when landlords do pay council tax, when tenants pay it, how empty properties are treated and the special situations where responsibility shifts back to the landlord. The rules are based on current practice and guidance from GOV.UK and applied by local authorities across the UK.

The basic principle of council tax liability

Council tax is charged on a property and one person is legally responsible at any given time. The council does not split the bill between landlord and tenant.

Responsibility is decided using a legal hierarchy that looks at:

Who lives in the property

What type of tenancy exists

Whether the property is occupied

Whether the property is a house in multiple occupation

The key point is this: the landlord only pays council tax when the tenant is not legally responsible.

When tenants usually pay council tax

In most standard residential lettings, the tenant is responsible for council tax.

This is the case where:

The property is let on a single tenancy

The tenant occupies the whole property

The tenancy is an assured shorthold tenancy

The tenant uses the property as their main home

In this situation, council tax liability passes to the tenant from the date they move in and ends on the date they legally move out.

This is the most common arrangement for buy to let properties.

When landlords do pay council tax

There are several situations where the landlord is legally responsible for council tax even though the property is being let or is intended to be let.

These situations are often misunderstood.

Empty properties

If a rental property is empty, council tax responsibility usually falls on the owner, not the tenant.

This means landlords typically pay council tax:

Between tenancies

While the property is vacant

During void periods

Some councils offer short exemptions or discounts for empty properties but many charge full council tax from day one.

As a landlord, you should always budget for council tax during empty periods.

Properties never occupied by the tenant

If a tenant signs a tenancy agreement but never actually moves in or takes possession, council tax liability may remain with the landlord.

This can happen where:

A tenancy is agreed but keys are not collected

The tenant withdraws at the last minute

The property is uninhabitable

Councils look at actual occupation not just paperwork.

Houses in Multiple Occupation (HMOs)

This is one of the most important exceptions.

In most HMO situations, the landlord pays council tax.

A property is usually treated as an HMO for council tax purposes if:

It is let by the room

Tenants have separate tenancy agreements

Facilities such as kitchen or bathroom are shared

In these cases, the landlord is legally responsible for council tax even though tenants live in the property.

This applies even if tenants are on benefits or students unless a full exemption applies.

Why HMOs are treated differently

The reason HMOs are treated differently is because:

There is no single household

Occupation changes frequently

Responsibility would otherwise be unclear

For council tax purposes, the owner is therefore made responsible.

Landlords often recover this cost by including council tax within the rent.

Student properties

Student properties have special rules.

If all occupants are full time students, the property is usually exempt from council tax.

In this case:

No one pays council tax

The landlord does not pay

The council tax charge is cancelled

However, if one non student lives in the property, council tax usually becomes payable and responsibility depends on the tenancy structure.

In many mixed student properties that are let by the room, the landlord becomes liable.

Short term and holiday lets

Short term lets can also make landlords responsible for council tax.

If a property is let on a short term basis such as:

Holiday lets

Serviced accommodation

Airbnb style lettings

The council may treat the property as:

A business property subject to business rates

Or a domestic property with owner liability

This varies by council and usage pattern.

Landlords operating short term lets should check classification carefully as council tax can become the owner’s responsibility.

Properties provided with services

If a landlord provides significant services beyond standard letting, council tax responsibility may shift.

This can apply where:

Cleaning is included

Meals are provided

The property is classed as serviced accommodation

These cases are less common but can affect liability.

Care homes and supported accommodation

In supported accommodation or care settings, council tax rules can differ.

Responsibility may lie with:

The provider

The resident

Or be exempt entirely

These arrangements are highly specific and should be checked with the local council.

When landlords do not pay council tax

It is equally important to understand when landlords do not pay council tax.

Standard single tenancy lets

In a normal buy to let arrangement where:

One household rents the whole property

The tenant occupies it as their main home

The tenant is responsible for council tax.

The landlord does not pay and should not be billed once the tenant has moved in.

During a valid tenancy

As long as the tenancy is legally in force and the tenant occupies the property, council tax liability remains with the tenant even if:

Rent is unpaid

The tenant is in arrears

The tenant is receiving benefits

Council tax does not revert to the landlord simply because the tenant stops paying.

How councils decide who is liable

Councils use a legal hierarchy to decide liability.

In simplified terms the order is:

Resident owner

Resident tenant

Resident licensee

Non resident owner

In HMOs and empty properties, the owner usually sits at the top of this hierarchy.

Understanding this hierarchy explains most council tax decisions.

What happens if a tenant does not pay council tax

If a tenant fails to pay council tax, the council will pursue the tenant, not the landlord, as long as the tenant is legally responsible.

The landlord:

Is not liable for the tenant’s arrears

Cannot be forced to pay the tenant’s council tax debt

Should not be billed for that period

However, councils sometimes contact landlords for information to help trace tenants.

Can landlords include council tax in the rent?

Yes.

Many landlords include council tax in the rent where they are legally responsible such as in HMOs.

This is common and allowed.

However:

The tenancy agreement should be clear

Tenants should understand what is included

Rent levels should reflect the additional cost

Including council tax can simplify administration for both parties.

What about council tax reduction and benefits?

Council Tax Reduction applies to the person who is liable.

If the tenant is liable, they may apply for reduction.

If the landlord is liable, the landlord cannot usually claim reduction unless they personally meet the criteria.

This is another reason landlords should budget carefully where they are responsible.

Landlords and council tax during evictions

During eviction proceedings, council tax responsibility depends on occupation.

If the tenant still occupies the property:

The tenant remains liable

Once the property becomes vacant:

Liability usually reverts to the landlord

This transition point often causes confusion and disputes.

Common mistakes landlords make

From experience, these mistakes come up repeatedly:

Assuming tenants always pay council tax

Forgetting liability during void periods

Not understanding HMO rules

Failing to notify the council of changes

Being billed incorrectly and not challenging it

Most council tax errors can be corrected but only if addressed early.

How landlords should protect themselves

Landlords can reduce problems by:

Informing the council when tenants move in and out

Keeping clear tenancy records

Understanding whether the property is an HMO

Checking council tax bills promptly

Challenging incorrect liability decisions

Communication with the council is key.

What to do if the council bills the landlord incorrectly

If you believe you have been billed incorrectly:

Contact the council’s council tax department

Provide evidence of tenancy dates

Provide copies of tenancy agreements

Request a liability review

Councils do make mistakes and they can be corrected.

Council tax and managing agents

Using a managing agent does not change legal liability.

Even if an agent handles council tax notifications:

The landlord remains legally responsible where applicable

Errors can still fall back on the landlord

Always double check that changes are properly reported.

Differences across the UK

Council tax rules are broadly similar across England Scotland and Wales but:

Discounts and exemptions vary by council

Empty property charges differ

HMO definitions can vary slightly

Always check local council rules rather than relying on assumptions.

A simple way to remember the rule

A helpful way to think about it is this:

If a tenant rents the whole property and lives there, the tenant pays council tax.

If the property is empty or let by the room, the landlord usually pays.

This rule covers most situations.

When professional advice is useful

Advice is particularly helpful if:

You operate HMOs

You run short term lets

You face council tax disputes

You have mixed use properties

Small misunderstandings can create ongoing costs.

Final thoughts

Landlords do sometimes pay council tax but not always. Responsibility depends on occupation and tenancy structure not ownership alone.

In standard buy to let properties with a single household tenant, the tenant is usually responsible. In HMOs empty properties and some specialist lettings, the landlord becomes liable.

Understanding these rules helps landlords budget accurately avoid disputes and ensure council tax is paid by the correct person. Council tax is one of those costs that quietly causes problems when misunderstood but is straightforward once the liability rules are clear.

You may also find our guidance on do you pay council tax on an empty property and what months do you not pay council tax helpful when reviewing your council tax position. For a full overview of council tax rules exemptions and reductions you can visit our council tax hub which brings all related guidance together.