Council tax responsibilities within houses in multiple occupation (HMOs) can often be a confusing and complex topic for both landlords and tenants. Knowing exactly who is responsible for paying council tax helps prevent disputes, unexpected bills, and ensures smoother landlord-tenant relationships. This article outlines clearly when landlords or tenants are liable for council tax payments and provides practical insights into navigating this important aspect of property management.

When Landlords are Responsible for Council Tax

In the majority of HMOs, landlords carry the responsibility for paying council tax. Unlike standard rental properties, tenants in HMOs usually sign individual tenancy agreements for their rooms and share communal spaces like kitchens, bathrooms, or lounges. Because these properties function differently, local councils typically classify them as single dwellings, holding landlords accountable for council tax payments.

This liability is governed by The Council Tax (Liability for Owners) Regulations 1992. Councils prefer this arrangement as it simplifies administration and facilitates efficient collection from a single responsible party—the landlord—rather than chasing payments from multiple unrelated tenants.

When Tenants Must Pay

Despite the general rule, there are important exceptions landlords and tenants must be aware of. If tenants collectively rent the entire property on a joint tenancy agreement, they become responsible for council tax. In this scenario, even if the property would otherwise qualify as an HMO under housing regulations, the collective responsibility means tenants are directly liable.

Additionally, self-contained flats within an HMO building often attract individual council tax bills payable by each tenant. A flat is considered self-contained if it has its own kitchen, bathroom, and other facilities, separate from the rest of the property. Each self-contained flat is typically assigned its own council tax band and bill.

Landlord Responsibilities and Best Practices

Landlords managing HMOs should integrate council tax obligations clearly into their financial plans and rental agreements. Omitting this expense can significantly affect profitability and tenant relationships. Clearly stating who is responsible for council tax within tenancy agreements reduces confusion and potential disputes.

Landlords should ensure that the cost of council tax is factored into rent calculations. Additionally, landlords must inform tenants about council tax responsibilities at the start of each tenancy to ensure transparency and avoid misunderstandings.

Tenant Responsibilities and Awareness

Tenants must carefully review their tenancy agreements to understand clearly who is responsible for council tax. If the agreement doesn’t explicitly mention council tax responsibilities, tenants should promptly seek clarification from the landlord or managing agent before signing.

Resolving Uncertainties

In cases of uncertainty regarding who should pay council tax, contacting the local council’s revenue department directly provides definitive answers. Councils can clarify their specific interpretation of regulations, giving landlords and tenants peace of mind and preventing unexpected financial burdens.

If you need any assistance with HMO-related matters, we offer a specialist HMO consultancy service. If you are looking for professional HMO management in London, feel free to contact us — we would be happy to help.