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Stockton-on-Tees Borough Council

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Council Tax information for landlords

council tax

As a landlord it is important you understand your responsibilities for Council Tax.

Please contact the team to find out about landlord Council Tax responsibilities or inform us immediately if there is a change in tenancy, to ensure we issue accurate and prompt bills, award discounts correctly and reduce unnecessary administration and visits to the property.

 

Landlord/Tenant Liability

Under Council Tax regulations, where a property is not anyone’s main residence, it is the owner of the property who becomes responsible for Council Tax. For the purposes of Council Tax, the Local Government Finance Act 1992 defines the meaning of ‘owner’ as:

An owner in relation to any dwelling is a person who satisfies the following conditions:

a) That they have a material interest in the whole or any part of the dwelling; and

b) That at least part of the dwelling (or as the case may be the part concerned) is not subject to a material interest inferior to their interest

It goes on further to explain the term ‘material interest’ as: "A freehold interest, or a leasehold interest which was granted for a term of six months or more."

Where a weekly or monthly tenancy is agreed (or a tenancy subject to notice of less than six months) the immediate landlord is the ‘owner’ for Council Tax purposes and liable for Council Tax when the property is not anyone’s main residence. Whereas if there is a six month or more shorthold assured tenancy the tenant will remain liable for council tax until this particular tenancy period expires.

Once the initial shorthold assured tenancy has expired the landlord and tenant have three options:

  • They can agree a further shorthold tenancy for an agreed period of time
  • The landlord can seek a new tenant
  • They can move to a periodic or rolling tenancy agreement.

 

What happens if a tenant moves out before the end of their tenancy agreement?

A tenant with a fixed-term tenancy for six months or more holds a material interest as defined above, and if they move out before the end of the fixed term, they are liable for unoccupied charges until their tenancy end-date. However, a tenant on a periodic or rolling tenancy does not have a material interest as defined above, therefore cannot be held liable for any unoccupied charge due.

 

What is a periodic tenancy?

Once a tenant’s fixed-term tenancy expires, if they stay on without a new fixed-term tenancy being drawn up then their tenancy becomes a periodic or rolling one, which means they no longer hold a material interest in the property. So although they can be charged for the period they are living in the property, they cannot be charged for any Council Tax charges if they move out and the property becomes no one’s main residence, even if they haven’t given the landlord notice in accordance with their tenancy agreement or indeed handed the keys back.

 

Is there any legal case which backs this up?

High Court case MacAttram v London Borough of Camden. In that case the Judge stated that fixed term and periodic tenancies cannot be joined together to make one total tenancy period of over six months. Instead of being a continuation of the original tenancy, the tenancy becomes a new periodic tenancy and so the tenant cannot be regarded as holding a material interest in the property from the start date of that new periodic tenancy.