Students and council tax: advice for landlords

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Students and council tax: Advice for landlords

When you rent out a property, in most cases the tenant is responsible for paying all of the utility bills and other charges, unless stated otherwise in a tenancy agreement.

However, confusion about who is responsible for bills can sometimes arise when a property is being let to students. As a rule, the same principles apply: If you draw up a tenancy agreement with an agreed rent that includes utility bills, the landlord is responsible. Otherwise, responsibility for paying utility bills lies with the tenant.

One area where different rules apply to students than other types of tenants is council tax liability. This guide will cover the following:

Council tax and students: The rules

Read the rules around how council tax applies to student lets, including who classifies as a full-time student and how council tax bills are calculated.

How bill-paying services can help simplify student bills

Find out how using a bill-paying service can make paying bills easier for students and landlords.

Council tax & students: The rules

As a rule, your property is exempt from council tax if it’s only occupied by full-time university or college students. Let’s take a look in more detail about how the rules around council tax apply to student lets.

Who is classed as a full-time student?

Students are considered to be in full-time education for council tax purposes if their course:

Covers at least 24 weeks, over a whole academic year.
Has at least 21 hours of weekly study during term time including tuition or work experience (source).

Students studying for a qualification up to A-level, who are under 20, must be on a course that lasts for at least three months, with at least 12 hours of study a week.

What proof do I need to show that I’m renting to student tenants?

To prove to the appropriate council that your tenants are full-time students, they will usually need to provide a Certificate of Student Status. Some authorities will accept the student’s university student number and course details.

You can read more about letting to students in our guide How to let your property.

What happens if I can’t get proof that my tenants are full-time students?

If your tenants can’t provide adequate evidence of their student status, your property will be liable for council tax. If the tenancy agreement hasn’t stated that liability for council tax lies with the tenants, you could be landed with the bill. Most local authorities are willing to discuss any problems you might have with getting proof from a tenant, and will suggest different ways their student status could be verified.

If your student tenants are handed a bill, they can apply for a council tax exemption on GOV.UK.

Do I need to pay council tax if my tenants are exempt?

A rental property is exempt from paying council tax if it is occupied entirely by full-time university or college students. So, if you intend to only let your property to full-time students, who can prove their student status, there will be nothing to pay either by the students or the landlord. To ensure the household remains exempt, clear rules have to be established about who can and cannot live there. Someone who had graduated and taken up a job would be expected to vacate the property. If this is clear from the beginning of the tenancy, it rarely causes any problems.

What if only one of my tenants is a full-time student?

If both students and non-students occupy a house, the blanket exemption doesn’t apply. Instead, full-time students are ‘disregarded’. This means that when the local council calculate the council tax liability of the property, the full-time students are treated as absent, and a discount might be applied.

Do part-time students pay council tax?

Part-time students are not exempt from paying council tax, but they may qualify for a council tax discount. If one of your tenants is a part-time student, the property will receive a council tax bill.

Do postgraduate students receive council tax exemption?

The majority of postgraduate students are undertaking part-time courses so are not exempt from council tax. If your tenants are full-time postgraduate students, they will be completely exempt from council tax. Research students often have a ‘writing-up’ period at the end of their programme, where they prepare their thesis for submission. Some authorities may decide to apply council tax liability; others won’t.

What happens if students take time off from their course?

Students often need to take time off from their studies. If they remain registered as a student and intend to go back to their studies, they will remain exempt from council tax.

How is a council tax bill calculated?

Council tax bills are based on the value of the property at a certain point in time. Based on the value, each property is placed in a council tax band, and each band is charged a different rate of council tax. The system varies in England, Wales, Northern Ireland and Scotland. Properties are split into eight bands (A-H), based on their value. If you think your property has been placed in the wrong council tax band, you can apply to have it revalued. Be aware, however, that your property could be placed in a higher band as a result of a revaluation (source).

A full council tax bill is usually based on two adults sharing a home. A 25% discount is applied for single adult households. If no one in the household counts as an adult for council tax purposes, a 50% discount will be applied.

Simplify student accommodation bills with a bill-paying service

Even though student households are exempt from council tax, there’s still a range of other utility bills that need to be paid. Unpaid bills are one of the biggest causes of arguments in shared student accommodation, and between tenants and their landlord. Bill-paying services can help take the stress out of shared bills.

They’re convenient, combining all of the household’s bills into one secure monthly payment. There are no problematic conversations to be had, as every person pays their equal share of the bills. If one of your tenants is late with their payment, then they will be contacted by someone from the bill paying service to remind them. Fewer disputes between tenants, mean fewer headaches for landlords. Bill-paying services can also help students and landlords find the most competitive energy bills.

Sorting out bill payments in multiple-occupancy households where there’s a relatively high turnover of tenants can be a real headache for landlords. Bill-paying services simplify the process, remove causes of conflict and help to make sure your tenants are getting the best deals. Services like Split the Bills will also give you the option to refer your tenants directly to them, and you can earn a commission for doing so.