Who is exempt from Council Tax

Who is exempt from council tax

10 Nov 2020

You will have to pay Council Tax if you're 18 or over and rent or own a property. For tenancy agreements six months or longer, tenants are liable for paying council tax bills while living on the property. If they leave the property before their agreement ends, they will remain accountable for the bill until the agreement ends or another tenant starts a new agreement.

In February 2022, chancellor Rishi Sunak announced the support payment for eligible households in council tax bands A to D. It is being distributed to help those facing the cost of the living crisis created by lockdowns. 

Yet, some families are waiting until September 2021 to get their share of the cash because it takes time to disburse all the payments as each council has its claim process, software/calculation method, and time to make payments. And in Scotland, some councils may choose to take £150 off council tax bills instead of giving the payment out. 

Those "disregarded" are exempt from Council Tax, and it includes -  

  • Full-time students, nurses, apprentices, and youth training trainees.

  • Members of religious communities like monks and nuns.

  • Care workers on low pay.

  • Individuals with major psychological impairments.

  • Those who are 18 to 19 years and have just left school.

  • Those in prison / except those in prison for non–payment of council tax.

  • Partners or employees of full-time scholars who may not be UK citizens and couldn't take high paying jobs.

  • An individual who stays in a treatment centre under full-time care facilities. Those bedridden and admitted to hospitals.

  • Specific groups of healthcare professionals.

  • Global head office as well as Defense Organizations ambassadors and attendees.

Some are not exempt from Council Tax; they are "disregarded", which means they are not counted for council tax. As a result, some may have to pay some amount of council tax, and they get a discount on bills if they live with people who are "disregarded" by the council.

There are other conditions where you may be asked to pay less like

  • You have a low income

  • You live alone or are the only adult.

  • You're a student, or you live with other students.

  • You get jobseekers allowance, income support, pension credit, employment and support allowance and universal credit.

  • You live with someone with a disability and, as a result, need to live in a larger home.

  • You suffer from mental impairments or live with someone suffering from such health issues.

  • In some counties, you get a discount on bills if you live with a care leaver or are a care leaver.

  • You served in the armed forces

  • You've moved into a care home or hospital, or if you are in prison. 

What Is The Council Tax? 

Council tax is a bill paid to your local council for social services, including policing, street cleaning, park maintenance, fire service, and other local support. It is paid to the local council, which allocates the funds themselves to handle such activities. Therefore, the value of your property and the number of people living in it will impact your council tax payments

The bands are estimated based on the property's value as of 1st April 1991. The date applies to properties in England and Scotland, but in Wales, it is 1st April 2003.

No matter how you owned the property, the value of the deceased person's share is counted as a part of their estate, and you will have to pay tax on property inheritance. The amount of Council Tax you pay depends on the size and value of your property and the number of people who live there. 

The council can increase bills in a year in line with the cost of services. The personal representative or executor of any deceased person's estate will handle all the financial matters. They must ensure that all debts and tax dues are paid before distributing the estate's assets.

In the case of property as a 'house in multiple occupations (HMO), the landlord is liable to pay council tax.

If you want to sell or rent out an inherited property, in that case, you will have to pay the related taxes on the rental income or any profit you make when you sell it, which will be mentioned in the rental agreements if you share a property with others, who should pay Council Tax depending on the type of tenancy agreement.

If you already bought a home and want to keep the inherited house, you'll have to nominate one of your homes as your main residence to compute the taxes. 

If you have signed a joint tenancy agreement, then the person or people named on the agreement, who has their sole or main residence at the property, will be liable to pay. This is because they will be jointly and separately liable.

If you inherit a part of a property and another owner is still living there, you'll need to agree with the other person to compute and pay the taxes. However, if you inherit a property that has a tenant, you have certain legal rights and responsibilities as a landlord to fulfil. 

What Is The Tax Exemption?

There are certain requirements for tax exemptions, like if a property is left unoccupied following the death of a person who was previously paying Council Tax, it may be exempt. The exemption is given indefinitely, providing the property remains unoccupied since the occupier's death and no grant of probate or letters of administration is made.

The exemption will cease six months after the grant of probate or letters of administration has been made or if the property is passed to a beneficiary, becomes occupied, or sold.

The exemption does not apply where the property remains occupied by other people or is jointly owned, and only one owner has passed away.

Providing only one person continues to live in the property, the Council tax is transferred into their name though it may grant a 25% single person discount. 

Council Tax Uninhabitable Exemption

If your property is uninhabitable, you may apply to get a 100% exemption against your Council Tax, water and sewerage charges. It is for up to 12 months from the date the property was last occupied. 

There are other situations where you may get a Council Tax rebate, like in the case of student council tax exemption

  • An occupied property will get a student council tax exemption for a student hall of residence. An occupied property is exempt from council tax when it is lived in only by some full-time students and their spouses or dependents and those who are not EU citizens. 

  • Some properties are 'exempt' from such charges. For example, it is the case where only full-time students occupy a property. Council Tax is payable when the property is not exempt, but there may be a discount on the bill because some adults or students are ignored when counting the number of adults living on the property.

There are separate rules for different situations, like – 

  • The resident is an individual residing with several other full-time basis scholars in the house alone or a full-time learner who lives in the primary residence. 

  • Every household with full-time learners has always been entitled to a full Council tax exemption. A full-time course is defined as one that lasts approximately one year and has classes for more than 21 hours every week. 

  • When all inhabitants seem to be full-time permanent students besides an adult who isn't a learner, individuals might be obligated to a discounted price on their Board subsidy. 

How Long Can Someone Stay Without Paying Council Tax? 

As long as an adult owns or rents a property in the UK, they must pay a council tax. You cannot avoid it unless you are qualified for exemption by your local council office. You need to apply for a formal exemption to get any discount on the bills. If you are dwelling in a property that was previously exempt from council tax payments, you may be able to avail the benefit for a maximum of 6 months.

However, suppose you were living alone and enjoying the 25 per cent council tax discount. In that case, the new lodger must inform the local council office as you are no longer eligible for a council tax discount. 

If a lodger shifts into your house and pays council tax as a single occupant, you must inform the local council if the new lodger is over 18, as in that case, your single occupancy rate will no longer apply. 

How To Avoid Paying Council Tax?

Any household occupied entirely by full-time students will qualify for a full exemption on council tax. Students living in halls are not liable for Council Tax, as these are classed as 'exempt dwellings'.

Or if the property is occupied by a dependent relative who is aged 65 years or more and is substantially and permanently disabled or severely mentally impaired. 

How To Reduce Council Tax?

If you belong to the low-income group, you can apply for Council Tax Support, where you may get a discount on your bill. Factors considered to offer the benefits are - income, any savings you have and whether you live with other adults, and your residency status. 

For example, your council tax bill for the residential property could be less if your house has features needed for the well-being of a person with a disability. In addition, you may claim a second adult rebate if you share your house with another adult who is on a low income but is not your partner or spouse. Contact your local authority if you think this may apply to you.

Which Properties Are Exempt From Council Tax?

Properties are occupied only by full-time students or school leavers, or those who are individuals under 18 years, individuals with severe mental impairment, foreign diplomats, or elderly/disabled relatives. 

Who Is Exempt From Council Tax In Scotland?

  • Eligibility for Council Tax Reduction is determined based on monthly earnings. You do not qualify if you hold more than £16K in savings, but the savings rule does not apply if you receive the guarantee part of Pension Credit.

  • Whether you own or rent your home, you can claim it regardless of whether you are working, unemployed, retired or a carer.

  • A property occupied by people aged 18 and up to 26 who left the care of the local council is exempt from Council Tax.

How To Avoid Paying Council Tax On An Empty Property?

Empty properties are exempt from council tax in certain circumstances like-

  • An empty property is exempt when owned by a registered charity or used for charitable purposes.

  • Part of the deceased's estate is exempt for up to 6 months after the grant of probate or letters of administration. 

  • If the occupation of the owner is prohibited by law. 

  • If the empty house is vacant for a minister of religion.

  • If the empty house is under a repossession order by a mortgage lender or is a caravan pitch or boat mooring. 

  • An empty annexe of a single property cannot be let separately. 

  • An empty property will also be exempt if it was last lived in by someone in prison and held the tenancy.

  • Individuals are living in a hospital, care homes, nursing homes, and hostels who need personal care or those living elsewhere to offer care for someone else, like a student who became a student within six weeks of leaving the property or a house undergoing a trustee in bankruptcy proceedings - are exempt. 

If your property is left empty for two years or more, you will have to pay the empty home's surcharge. However, empty homes that are the sole or main residence of a member of the armed forces who is absent from the property due to such a service cannot be charged a surcharge. 

Do I Have To Pay Council Tax If I Live With My Parents?

If you are not an adult, you don't have to pay; if you are a student, whether or not you are 18 years old, you are not counted as an adult for council tax as you are considered "disregarded". 

The parents will continue to get the adult 25% discount when:

  • The child is 16 or 17, even if they are working or getting benefits.

  • If the child is 18, they get Child benefits for them.

  • For a full-time student or on a government training scheme 

The parents may lose the 25% discount if:

  • the child is 18 or over(depending on their circumstances)

 Council tax arrears are a "priority mortgage"; you should pay it off before approving other loans, including credit scorecards. 

When Do I Start Paying Taxes?

Except in some cases, you'll normally pay Council Tax when you are 18 or over. This is because the local authority issues council Tax bills for the financial year, and you can pay at the start of the new financial year on 30th April. You can choose whether you pay over ten months or 12 monthly instalments. However, it is applicable when two adults live on a property. 

There is only one council tax bill for each house. In such cases, all who live in the house are jointly responsible, and their names will appear on the bill. Whether you rent or own a house, you must pay council tax


A full Council Tax bill is applicable when at least two adults live in a home because spouses and partners are jointly responsible for paying. However, if you live on your own or no one else on your property counts as an adult, you'll get 25 per cent off your bill. When you leave your current address, the council sends you the final bill, and then you'll get an annual bill for the property at your new address.

If the property remains empty after the agreement ends, who is responsible depends on what is agreed upon in the tenancy agreement. For example, if the agreement states that tenants need to give notice at the end of their tenancy, they may be responsible until that notice period ends. 

After that, it would usually be the case when they stop paying rent on the property. There are further rules for different circumstances, and in the above article, we have mentioned some conditions when you may get an exemption from council tax.

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