Do you pay council tax if you rent?

Renters

Do you pay council tax if you rent?

In short - yes, most renters have to pay council tax.

...probably not the answer you were hoping for, sorry!

Especially if you’re renting for the first time, it can be confusing anticipating exactly what you’ll have to pay for over the course of a tenancy. You thought you’d worked out your budget, factoring in rent, heating, electricity, water.... but ouch - you forgot about council tax. Bit of a nasty surprise.

“Why do we even have to pay council tax...” *mutters grumpily*

Consider us your fairy godmother. We’ll talk you through everything you need to know, from who has to pay it (and who doesn’t) to how much it’ll be. So grab a cuppa, settle in and read on.

What is council tax?  

Council tax is an annual fee you have to pay to your local council.

It covers the cost of the local services provided to you, such as rubbish collection, road maintenance, libraries, and street lighting and cleaning. It also includes funding for your local fire and police stations; so pretty much all the big and little things that happen around to make where you live safe and clean.

How much is council tax?

The cost of council tax depends on where you live and what property you live in.

Every home in England sits in a council tax band between A and H, in Wales the bands range from A to I. Market value, size and location dictate which bands the properties are in, and each band charges a different amount of council tax.

Slightly confusingly, local council’s have their own prices for each band. Therefore, no matter if you’re moving from one band A property to another, you can’t assume that you’ll be paying the same amount of council tax.

In particular in London, council tax can vary significantly. In neighbouring boroughs Lambeth and Wandsworth there is currently as much as a 50% price difference between the bands. You could end up having to pay £1060 council tax a year, compared with £580 if you lived in a different borough - worth bearing in mind.  

As a result, if you’ve set your sights on moving to a new house, it might be a good idea to find out roughly how much the council tax would be. MyCouncilTax is a useful tool that can calculate an estimate for you. All you have to do is type in the postcode of the property. Wondering what else you need to think about when considering moving house? Have a read of our ‘House viewing checklist for renters’.

Who pays council tax?

Typically, council tax must be paid by the person living in the property. So yes - you do pay council tax if you rent; the responsibility sits with the tenant, not the landlord.

When you move into a new property you must register with the local council. Not sure who your local council is? Find out on the government website here.

You will have to fill in a few details, including whether or not you live with housemates. If you live alone, unfortunately you will have to foot the bill (although at a reduced cost). If there’s a bunch of you living together, you can divide the cost equally between you.

Council tax has to be paid by homeowner-occupiers too. And if a landlord has a property sitting empty, they have to pay the council tax whilst they wait for a tenant to move in.

Do students pay council tax?

Some good news - full-time students do not have to pay council tax! No matter whether you’re living in university halls of residence or renting a house. Part-time students, however, do have to pay it.

Are there any other exemptions or discounts?

Yes, there are a few other groups who do not have to pay council tax:

  • Those under 18 (and therefore not classified as adults)
  • People on apprenticeship schemes
  • Asylum seekers
  • Live-in carers who look after someone who is not their partner or child
  • Diplomats

In these instances, the tax must be paid by the landlord.

If you live alone or you live with housemates but you’re the only adult, you can apply for a 25% reduction from the council tax bill. This should be given to you once you’ve filled in the registration form.

How often do you pay council tax?

It’s a yearly fee. However, to make it more palatable the council often gives you the option to spread the cost and pay it in 10 or 12-month instalments, and you won’t be charged any interest.

Most people arrange to pay their council tax through direct debits. This allows you to choose which day of the month the money goes out of your account and, once set up, the instalments will automatically be paid on time without having to set calendar reminders or leave notes on the fridge.

Another bonus of paying your council tax by direct debit? It can help build your credit score. Credit scores are becoming increasingly important these days, whether you’re applying for a mortgage, a credit card, a new tenancy, or even a job (yes, some employers really do ask to view your credit report before hiring *gulp*). Find out more by reading ‘Does paying rent help boost your credit score?’.

Alternatively, you can choose to pay the lump sum in one go. If you have the cash available and you can afford to do so, you might want to look into this option as some local councils offer a discount as an incentive for the one-off payment.

If you don’t set up a direct debit and you miss paying one of the instalments, you will be sent a reminder by the council and given 7 days to sort it. You must act on this as soon as possible. If you miss the deadline, you will then have to pay the entirety of the remaining annual tax bill upfront - which might sting a bit!

So there you have it, everything you need to know about council tax. Whilst you're sorting out your council tax, why not sort your renters insurance? Read more on contents insurance here or get a quote here.

Why not continue reading about:

5 things you need to know about tenancy deposits

The best ways to find a flatmate in 2021

What documents do I need to rent a flat?