A Council Tax charge on a property generally requires that either the property is occupied or unoccupied. What is occupation for the purposes of Council Tax and how is it determined ?
Council Tax as a Daily Charge
Council Tax charges are calculated on a daily basis and therefore the circumstances for each individual day must be taken in to account when determining the charge. The Local Government Finance Act 1992 (LGFA92) states that;
2 Liability to tax determined on a daily basis
(1) Liability to pay council tax shall be determined on a daily basis.
(2) For the purposes of determining for any day–
(a) whether any property is a chargeable dwelling;
(b) which valuation band is shown in the billing authority’s valuation list as applicable to any chargeable dwelling;
(c) the person liable to pay council tax in respect of any such dwelling; or
(d) whether any amount of council tax is subject to a discount and (if so) the amount of the discount,
it shall be assumed that any state of affairs subsisting at the end of the day had subsisted throughout the day
What is a ‘Resident’ for Council Tax?
The definition of resident is defined in Section 6 of the Local Government Finance Act 1992
“resident”, in relation to any dwelling, means an individual who has attained the age of 18 years and has his sole or main residence in the dwelling.
There is no minimum period of occupancy required to be regarded as being resident in a property (in some case residence can be regarded as taking place even if the property is not physically occupied)
What is ‘Sole or Main Residence’ for Council Tax ?
In order to be considered as being resident in a property for Council Tax purposes it must be a person’s ‘sole or main residence’ for the day in question. Most people only have one residence however, where a person lives between multiple properties, determination of the ‘sole or main residence’ becomes more important.
‘Sole or main residence’ is not specifically defined in legislation however case-law has determined that a good indication of a person’s ‘sole or main residence’ would be to consider where an independent, outside observer, would say that person was living when presented with the information at hand. There is no minimum period of occupancy required to be regarded as being resident in a property (in some case residence can be regarded as taking place even if the property is not physically occupied)
If this consideration of ‘sole or main residence’ would indicate that they are no longer living in the property and there was no ‘intention to return’ to live in it then it is likely that they would no longer be regarded as resident for Council Tax purposes and the property may be regarded as unoccupied.
John and Emma live at Property A at their family home. Both John and Emma have the property as their ‘sole or main residence’ and are therefore resident for Council Tax purposes.
Emma moves to Property B as she works in that area. She rents a room in Property B and stays Monday to Friday but returns to Property A on weekends. She would move back to Property A if her job was to end. Emma is still regarded as being resident at Property A for Council Tax purposes as it remains her ‘sole or main residence’ .
Emma decides that she no longer wants to return to live at Property A. It is likely that she ceases to be regarded as resident at Property A and it therefore ceases to be her ‘sole or main residence’. In the absence of any other residence then she would likely be regarded as resident at Property B. If John was still resident at Property A by himself then he could claim a single occupancy discount.
A key piece of case law in respect of ‘sole or main residence’ is that of R(Williams) v Horsham District Council 2004 where it was stated that:
The qualification “sole or main” addresses the fact that a person may reside in more than one place. We think that it is probably impossible to produce a definition of “main residence” that will provide the appropriate test in all circumstances. Usually, however, a person’s main residence will be the dwelling that a reasonable onlooker, with knowledge of the material facts, would regard as that person’s home at the material time. That test may not always be an easy one to apply, but we have no doubt as to the conclusion to which it leads in the present case.
What is ‘occupancy’ for Council Tax ?
Although occupancy and residence go hand in hand in most cases the two terms are separately defined within Council Tax legislation. A person can be in principal be in occupation of a property without being ‘resident’ in the property. Many Council Tax reductions or premiums require occupancy (such as the ‘long-term empty’ premium) and therefore do not directly appear to require ‘residence’.
An un-occupied dwelling is defined as
an “unoccupied dwelling” means a dwelling in which no one lives.
and likewise the definition of an occupied dwelling should be read on this basis
In appeal 0345M108475/037C the Valuation Tribunal, when considering the position of occupation versus residence stated that;
A property that is unoccupied is defined as one in which no one lives and while the appeal property may indeed have remained the Appellant’s main residence, to where she would return when the work being done was completed, she was not actually living in the dwelling during the period in issue in this appeal.
Similar comments were also made in respect of appeal 4725M179333/254C
The fact that the tenant’s sole or main residence had changed was not the determinative factor. Whilst a person’s sole or main residence can only be at one address on any one date, a person could potentially still occupy or furnish two dwellings at the same time.
This point however appears to need further clarification by way of Tribunal decisions and High Court appeal as it open to argument in many cases.
What about Council Tax Discounts, Exemptions and Premiums ?
Some discounts, exemptions and premiums will only apply where a property is unoccupied. Where the property is occupied these particular adjustments will not apply to the Council Tax charge although they may apply following vacation of the occupiers.
For example, the 25% ‘single person discount’ requires that there be at least on resident who has their ‘sole or main residence’ in the property. If there isn’t anyone who has their ‘sole or main residence’ in the property then no 25% discount could be applied to the Council Tax charge.
What happens if I move out of a property and it’s left unoccupied ?
If you move out of a property then you may still be regarded as liable for the Council Tax charge in some cases. If the property is unoccupied then consideration must be given to the findings made in the case of Leeds City Council v Broadley.
Assistance from LGFA92
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This article is solely the view of LGFA92, the Council Tax experts, based on our interpretation of legislation. Your local authority is free to dispute this view. A binding decision may require the intervention of a valuation tribunal.