Paying council tax when a tenant leaves

The law sets out that when a property is empty, the owner is liable for council tax. The owner is whoever has a material interest in the property - either with a freehold or leasehold interest granted for 6 months or more.

Assured shorthand tenancies

A common form of tenancy is an assured shorthold tenancy (AST) for a fixed term such as 6 months.

A tenant with a fixed-term tenancy of 6 months or more holds a material interest and if they vacate before the end of their tenancy, they will be liable for the council tax empty charge until their tenancy end-date.

If a tenant remains in the property after the expiry of the 6 months (in the absence of any provision in the original contract to the contrary or a new contract being entered into), then the AST automatically reverts to a statutory periodic tenancy.

Statutory periodic tenancies

If a tenant reverts to a statutory periodic tenancy this starts a new contract, and if the rent is paid calendar monthly, then the contract runs on a month-by-month basis. 

A tenant with a month-by-month statutory periodic tenancy does not have a material interest in the property, so they are only liable for council tax while they are living in the property. Once they vacate, the landlord will be responsible for the council tax empty charge.

Contractual periodic tenancy

Instead of a statutory periodic tenancy, landlords can make clear in the original tenancy agreement that the tenancy will become a contractual periodic tenancy after the fixed period.

This means the tenant continues to have a material interest in the property as the extension is treated as a continuation of the original contract. 

Case law

Case law has provided clarity as to who is liable for the council tax once a tenant vacates.

In the High Court case of MacAttram v London Borough of Camden 2012, the judge stated that fixed term and statutory periodic tenancies cannot be joined together to make one total tenancy period of over 6 months.

Instead of being a continuation of the original tenancy, the tenancy becomes a new periodic tenancy and so the tenant cannot be regarded as holding a material interest in the property from the start date of that new periodic tenancy. 

In Leeds City Council v Broadley 2016 the High Court held that a contractual periodic tenancy following a 6 month fixed term takes effect as a single term and not as two separate tenancies. Therefore the council tax liability remained with the tenant rather than the landlord.

Last updated 07 March 2023