Liability and exemptions

The owner is always liable where the dwelling is one of the following:[1]

• Care homes or certain hostels

• Houses of religious communities

• Second homes with domestic servants

• Residencies of ministers of religion

• School boarding accommodation

• Accommodation provided to asylum seekers under s.95 of the Immigration and Asylum Act 1999

• Houses in multiple occupation (HMO), where the tenants or licencees have separate agreements that give them the individual right to occupy only part of the dwelling

In an HMO where all occupants are jointly liable for the full rent and occupy the whole property, those joint tenants would be liable for council tax, and not the non-resident owner.

Hierarchy of liability

There is then what is known as a ‘hierarchy of liability’. The first person in this list is considered to be liable to pay the council tax:

• a resident owner of all or part of the property

• a resident tenant of all or part of the property

• a resident sub-tenant of all or part of the property

• a resident with no security of tenure

• a non-resident owner of any part of the property unless there is a non-resident tenant or sub-tenant who has a lease (or sub-lease) of six months or more

If no one in the list above is resident then the non-resident owner is liable.

If two or more people fall into the liable category they may be jointly and severally liable (except if one is severely mentally impaired or a student)

Additionally, the liable person’s partner or spouse is jointly and severally liable if they are resident in the dwelling.

Where a non-resident landlord writes a term into a tenancy agreement that an HMO tenant is liable for council tax, the Upper Tribunal has ruled that this would be an unlawful premium under Section 82-90 of the Rent Scotland Act. [2]

The local authority has a variety of powers to identify who has liability. A person who believes they have been wrongly identified as liable can appeal against this and there is no time limit for making an appeal.[3]

The following unoccupied properties are exempt for up to six months (and longer in some cases):[4]

• Unoccupied new dwellings

• Dwellings under repair

• Dwellings last occupied by charitable bodies

• Empty dwellings

• Dwellings last occupied by persons living or detained elsewhere

• Deceased owners

• Dwellings empty under statute

• Dwellings awaiting demolition

• Unoccupied dwellings for students

• Unoccupied dwellings for occupation by ministers of religion

• Repossessed dwellings

• Agricultural dwellings

• Difficult to let separately (e.g. granny flats)

The following occupied dwellings are exempt indefinitely:[5]

• Only occupied by one or more students, school or college leavers or under 18 year olds

• Only occupied by a student and their spouse or dependent, where the spouse or dependent is not a British citizen and is not permitted to work or claim benefits in the UK

• Only occupied by one or more 'care leavers'

• Housing association ‘trial property’ for older people or people with disabilities

• Student halls of residence

• Armed forces accommodation

• Visiting forces accommodation

• Garages, carports and storage sheds

• Is occupied by ‘severely mentally impaired person’

• Is ‘prescribed housing support accommodation’

• Only occupied by one or more people who are in the UK under the Homes for Ukraine Sponsorship Scheme, where the accommodation is provided by an approved sponsor – this exemption only applies where it is their sole or main residence [6]

• Where the accommodation is provided with no payment in return, and only occupied by one or more people who are in the UK under one of the following schemes – this exemption only applies where it is their sole or main residence: [7]

  • the Afghan Citizens Resettlement Scheme

  • the Afghan Relocations and Assistance Policy

  • the Community Sponsorship Scheme

  • the UK Resettlement Scheme

  • the Vulnerable Children’s Resettlement Scheme

  • the Vulnerable Persons Resettlement Scheme

In general, students are defined as those enrolled on 'full time, qualifying course'. This is defined in more detail within in the legislation. [8] In calculating whether someone is a full time student it was held that 'formally documented' additional hours, in order to mitigate disadvantage as a result of a disability, could be included in calculating whether the course was for an average of at least 21 hours per week during term time.[9]