If a tenant rents a property and it is their only or main home (that is, their sole or main residence), they are usually responsible for the Council Tax (unless the property is a House in Multiple Occupation, or HIMO).
If a tenant rents a property but their main home is elsewhere, then if the tenancy agreement is for less than six months, the owner is responsible for paying the Council Tax, not the tenant. However, if the tenancy agreement is for six months or more, then the tenant is responsible for paying the Council Tax, even though they might be paying Council Tax for their main home too.
If a tenant has a tenancy agreement for six months or more and moves out before the official end of the tenancy, they are responsible for paying the Council Tax up to the end of the tenancy agreement. But if their tenancy was for less than six months, the owner is responsible for the Council Tax after the tenant has moved out. From 01.04.13, the full Council Tax is payable for an unoccupied property, regardless of whether it is furnished or unfurnished.
Houses in Multiple Occupation
The exact definition in the Council Tax regulations is given at the end of this page. To put this plainly, a HIMO is:
• a property that was built, or that has been changed, so that people who are not a family, or not living like a family, can live there. For example, an ordinary house turned into bedsits but with only one kitchen which everyone shares; or
• a rented property where the tenants rent a room each; or
• a rented property where the tenants rent the whole house between them but each one pays his/her own rent and is not responsible for any of the other tenants' rents.
What is considered when deciding whether a property is a HIMO?
When we are considering whether a property is a HIMO, we consider:
1. how the building has been constructed or adapted, (for example, whether it's a collection of bedsits with a shared bathroom, whether there are locks on bedroom doors); and
2. whether the tenants are jointly or individually liable for the rent on the whole property.
As regards point 1, if locks are present on bedroom doors, we would class the property as a HIMO; however, if the tenants hold a tenancy for the whole dwelling for six months or more, then they themselves would be treated as being the 'owner' and would therefore be liable for the Council Tax (see below for the definition of ‘owner’ in relation to a HIMO).
The question of locks being classed as an adaptation has been challenged in Valuation Tribunals and the High Court. However, a case went to the Court of Appeal (Hayes v Humberside Valuation Tribunal and Kingston-upon-Hull City Council), and the judgement was that the presence of locks on doors is an adaptation to make a dwelling suitable for occupation by more than one household, therefore a property with locks on bedroom doors is regarded as a HIMO.
To decide on point 2, we look at the terms of the tenancy agreement or licence, and also at how the rent is actually paid - whether the tenants have individual rent books or whether there is any other evidence that they are clearly only responsible for their own share of the rent.
Normally, if the tenants have separate tenancy agreements, this indicates they are not each responsible for the rent on the whole dwelling, so the property is a HIMO and the owner is liable.
If the tenants have a joint tenancy, then they are each liable for the whole rent, so the property is not a HIMO and the tenants are liable. However, if a joint tenancy agreement shows separate rents for each tenant, then this again indicates that they are only liable for a part of the rent, so we would need to investigate further and may well class the property as a HIMO in spite of the joint tenancy agreement.
Definition of a HIMO in the Council Tax legislation:
A dwelling which:
• was originally constructed or subsequently adapted for occupation by persons who do not constitute a single household; or
• is inhabited by a person who, or two or more persons each of whom either
- is a tenant of, or has a licence to occupy, part only of the dwelling; or
- has a licence to occupy, but is not liable (whether alone or jointly with other persons) to pay rent or a licence fee in respect of, the dwelling as a whole.
Definition of ‘owner’ in relation to a HIMO
The person as regards whom the following conditions are fulfilled –
a) he has a material interest in the whole or any part of the dwelling; and
b) at least part of the dwelling or, as the case may be, of the part concerned is not subject to a material interest inferior to his interest.
In this context, “material interest” means a freehold interest or a leasehold interest which was granted for a term of six months or more.