Bills and council tax in rental properties: who pays what?

In most tenancies the occupying tenant pays both the council tax and the utility bills, and the landlord pays neither while the property is let. The exceptions matter, though, because liability for council tax returns to the landlord when the property is empty between tenancies, when it is a house in multiple occupation, and in some multi-let arrangements. This guide sets out who pays what, when responsibility shifts to the landlord, and how bills-inclusive lets work.

Who pays council tax, the landlord or the tenant?

On a standard assured tenancy, the tenant pays the council tax. Liability follows a statutory hierarchy that puts the resident first, so an adult tenant living in the property is the liable person and is billed directly by the council, as set out on gov.uk. The amount depends on the property’s council tax band and the local authority’s rate, and the tenant, not the landlord, deals with the council for the duration of the tenancy. Where two or more adults share on a single joint tenancy, they are jointly liable.

The practical point for landlords is that you do not pay council tax on a normally occupied let, and the tenancy agreement should make clear that the tenant is responsible for it along with the utilities.

When is the landlord liable for council tax?

Liability returns to the landlord in a few specific situations. The most common is the void, the empty weeks between one tenancy ending and the next beginning, when there is no resident and the owner becomes liable. When a property stands furnished and empty between lets, a different charge can apply, the second home council tax premium, which can double the bill in an adopting area. Across the landlords using August, the council tax cost that catches people out is exactly this gap, and many councils now charge a premium on homes left empty for a long period, so a drawn-out void can cost more than the standard rate. Our guide to void periods covers how to reduce that exposure.

The second is a house in multiple occupation. For council tax purposes the landlord, not the tenants, is liable for an HMO, and this is the case whether or not the property needs an HMO licence. The third is a property let room by room on separate agreements, which is treated similarly, with the owner liable rather than each occupier. In each of these cases the cost is the landlord’s to budget for, and where the property is let to full-time students it is exempt, while a single occupier qualifies for a 25 per cent discount.

Who pays the utility bills?

Gas, electricity, water and broadband are normally the tenant’s responsibility, and the tenant should put the accounts into their own name at the start of the tenancy. The landlord becomes responsible for standing charges and any usage only while the property is empty. As with council tax, the tenancy agreement should state plainly that utilities are the tenant’s, and a meter reading taken at check-in and check-out protects both sides from being billed for the other’s usage.

Are bills included in the rent?

Some landlords let on a bills-inclusive basis, where the rent covers council tax and utilities and the landlord pays the suppliers. This is common in HMOs and in lettings to students and young professionals, because a single all-in figure is simple for tenants and can let a room faster. A landlord can, in effect, pay the council tax and bills for a tenant this way, but the cost and the risk then sit with the landlord rather than the occupier. The bills-inclusive lets that work are the ones with a fair-use cap written into the agreement, so an unusually cold winter does not turn a tidy rent into a loss. Our guide to all-inclusive rent explains how to structure it, and our guide to setting the right rent covers pricing a bills-inclusive let so the margin holds.

Council tax at the start and end of a tenancy

The handover is where council tax errors happen. When a tenant moves in, they or you should tell the council so the bill transfers into their name from the start date, and when they move out, the council needs to know the tenancy has ended so liability returns to you for any void. Keeping a record of those dates, and of the bills and council tax you carry during a void or a bills-inclusive let, keeps the cost visible and your tax records clean. Logging those costs as you go is what expense tracking is for, and it means the figures are ready when you complete your return rather than reconstructed at year end.

What if the tenant does not pay their council tax?

Where the tenant is the liable person, the council pursues the tenant, not the landlord, for any unpaid council tax. A landlord is not responsible for a resident tenant’s council tax arrears and is not chased for them. The exception is the situation where the landlord is the liable party in the first place, such as an HMO or an empty property, in which case the bill is the landlord’s regardless of any arrangement with the tenants. This is one reason the distinction between who occupies and who is liable matters so much in practice.

Frequently asked questions

Who pays council tax, the landlord or the tenant?

On a normal tenancy the occupying tenant pays the council tax and is billed directly by the council. The landlord does not pay it while the property is let to a resident tenant.

Does the landlord pay council tax when the property is empty?

Yes. When there is no resident, liability returns to the owner, and many councils charge a premium on homes left empty for a long time, so a long void can cost more than the standard rate.

Are landlords responsible if the tenant does not pay council tax?

No, where the tenant is the liable person the council pursues the tenant, not the landlord. The landlord only carries the council tax where they are the liable party, such as in an HMO or during a void.

Can a landlord include bills in the rent?

Yes. On a bills-inclusive let the rent covers council tax and utilities and the landlord pays the suppliers, which suits HMOs and student lets. A fair-use cap in the agreement protects the landlord against unusually high usage. You can start for free and track the bills and council tax you carry against each property.

Disclaimer: This article is intended for general informational purposes only and does not constitute legal, financial, or professional advice. Landlord and tenant law is subject to change, and the information in this article reflects the position at the time of writing. You should always seek independent legal or professional advice before taking any action in relation to your property or tenancy.