Section 6 of the Local Government Finance Act 1992 sets out who is liable for the council tax. The owner is liable where there are no residents.
The "owner", in relation to any dwelling, is the person who fulfils the following conditions:
- has a material interest in the whole or any part of the dwelling; and
- 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
'Material interest' is defined as “a freehold interest or a leasehold interest which was granted for a term of six months or more”.
What happens if a tenant moves out before the end of their tenancy agreement?
A tenant with a fixed-term tenancy for six months or more holds a material interest as defined above. If they move out before the end of their tenancy, they are liable for unoccupied charges until their tenancy end-date.
However, a tenant on a periodic or rolling tenancy does not have a material interest as defined above. Therefore, they cannot be held liable for any unoccupied charge due.
What’s a periodic tenancy?
Once a tenant’s fixed-term tenancy expires, and they stay on without a new fixed-term tenancy, it becomes a periodic or rolling tenancy. This means they no longer hold a material interest in the property.
So although they can be charged for the period they are living in the property, they cannot be charged for any unoccupied council tax charges if they move out – even if they haven’t given the landlord notice in accordance with their tenancy agreement.
What about tenants who do not move in on their tenancy start-date?
If their tenancy is a fixed-term tenancy for six months or more, they will be liable for the unoccupied council tax charge from the date their tenancy starts, until the date they move in.
Once they move in, they will be liable for the occupied rate of council tax as long as the property is their sole or main residence.