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Council Tax – who is ultimately liable?
Landlords should be acutely aware of the ultimate liability of the land owner to pay council tax on any property in the event that the tenant fails to do so. A strict hierarchy of liability to pay council tax follows:
1. person(s) resident with a freehold interest in all or in part
2. person(s) resident with a leashold interest in all or in part
3. person(s) resident with a statutory,m secure or introductory tenancy of the whole or part
4. person(s) resident wiht a contractual licence to occupy whole or part
5. person(s) resident
Where an HMO (house in multple occupation) exists, the Landlord, rather than the tenants, will pay the council tax unless the tenants are occupying under a joint, group tenancy arrangement. It is worth noting that the definitions of an HMO vary between local authorities, and differ when taken for the purposes of council tax rather than enivronmental health or housing issues. Landlords should also ensure that their tenancy agreements provide for increases in rental or other contributions to allow for increases in council tax bills for the property, as there is no automatic right to raise the rent if the council tax increases.
For definitions of HMO’s and further details please do to https://www.gov.uk/private-renting/houses-in-multiple-occupation.