Stressed Landlords

The Changing Rules Around Council Tax For Landlords

The responsibility of landlords for paying their council tax on empty rental properties has often been an area of confusion regarding what exactly is payable and where the responsibility lies. Each individual local authority applies its own laws so it’s important to clarify exactly what you, as a landlord, need to pay if your rental property is empty temporarily, for example, while you carry out repairs or wait for new tenants to move in.

The law regarding Council Tax exemption and discounts is very much at the whim of your local council. For landlords who own property in Walsall Council, the rules applying to Council Tax exemption have recently changed.

Payment of your tenant’s outstanding council tax

Redstones understands that due to new rules which came into force on 1st April this year, if a tenant is on a periodic contract (one that rolls on from week to week or month to month after the original fixed term has expired) and leaves the property with an unpaid council tax bill, the landlord is responsible for payment of Council Tax from the date the fixed term tenancy agreement ends, not from the date the tenant leaves.

For example, let’s say your tenant’s contract ends on 1st January but they continue with a periodic contract for three months, serving notice on 1st April and leaving your property on 1st May.

If that tenant hasn’t paid council tax up until the date they leave your property, you, as a landlord must pay all outstanding council tax, irrespective of the fact that your tenant still occupied your property three months after the original fixed term agreement ended.

Council Tax exemption for empty properties

As a landlord, you may be forgiven for believing that you are entitled to a three month exemption on your empty rental property but the rules for Walsall have now changed.

The exemption period is now just one week.

This puts additional pressure on landlords to find a tenant to occupy their property within one week of the previous tenant leaving, regardless of any cleaning, maintenance or repairs that may need to be carried out.

A further point to note is that only dated tenancy agreements can be used in relation to proving responsibility for council tax. In other words, a periodic tenancy agreement will not apply.

At Redstones, we are aware of at least one landlord who has recently been forced to pay two months’ of council tax payments as their tenant was on a periodic contract but had failed to pay council tax for the final two months they lived in the property.

What can landlords do?

Councils can largely apply their own rules so our advice is:-

  • Contact your local council if you know your rental property will be empty and for how long.
  • Confirm when you are liable for Council Tax and what, if any, discounts or periods of exemption are available.
  • Keep vacant periods to a minimum
  • Incorporate council tax into your budget, especially if your property lies in an area where Council Tax exemption periods are limited.
  • Speak to Redstones about your property management options. We provide a range of service and up-to-date advice on the growing number of legal obligations now applied to landlords.