Becoming a landlord comes with a whole host of new responsibilities. You are becoming a home-owner all over again albeit to let it to a tenant.
Whilst the property has a tenant living in it, the tenant will be responsible for paying the rent, gas and electric bill, and many other bills associated with living in the property including council tax (unless otherwise agreed). So, who is responsible for paying the Council Tax whilst the property is empty (also known as a void period)?
What is Council Tax?
Council Tax is a tax levied on properties on the UK. Local councils are responsible for setting the tax and the cost is determined by the band the property is given. It is largely based on property size. When you purchase a property make sure you find out the Council Tax band and the cost of that band with the relevant council. Changes made to a property can affect the band, so it is important to report these. Things such as demolishing part of a property, converting a property into flats, adding more living space such an annexe or changes to the area such as new road can all be reasons to revalue and change the band of a property.
Who must pay Council Tax?
If you are 18 or over and renting a home, or own one you are likely to be liable to pay Council Tax. If you live in a property on your own there is usually a 25% discount which is called single occupancy. There are also reductions if the adults in the property are full-time students. You will need to apply to your local council for a reduction.
Council Tax on 2nd property
As a landlord, you will be liable to pay the Council Tax on your rental property whilst it is not tenanted but you may pay less Council Tax for a property that is not your main home. Some councils offer a grace period or discount for an empty property, but it is important to note that this can be per property, per year so if you have recently purchased a property as an investment you should check if the grace period was used by the previous owner. Individual councils will decide the reduction. If you are refurbishing a property your council will tell you when you need to start paying Council Tax. It is also important to inform the local council of any change of tenant so they can issue the Council Tax bill to the named tenant.
There are many considerations when you decide to let a property and become a landlord. KeyRing Lettings are happy to discuss the formalities of letting a property with any potential landlord.