Renting out a room and Council Tax

By | September 25, 2016

Renting out a roomIt is becoming more and more popular for people to be renting out individual rooms within a property in which they are resident.

Many people however are not aware of the council tax implications which may arise from this and lose out financially.

Initial Considerations

When renting out a room the initial consideration in determining if there’s any effect on the Council Tax charge is whether the lodger has their ‘sole or main residence’ in the property or if they have their ‘sole or main residence’ in a different property.

Sole or main residence and renting a room

‘Sole or main residence’ is a Council Tax concept. A simple guide would be to consider the place where an outside observer would say a person lived if they looked at their situation.

If the lodger has their ‘sole or main residence’ in the property then they must be taken in to account as being resident for Council Tax purposes. This means that, unless the lodger can be disregarded (e.g. they are a full time student), any discounts or exemptions received are likely to be reduced.

If the lodger does not have their ‘sole or main residence’ in the property then they will not be taken in to account as living in the property for Council Tax purposes – in this case the lodger must have a property elsewhere which is their¬†‘sole or main residence’ (e.g. someone who lodges during the week whilst working away). This situation is quite common and discounts are often removed (wrongly) because of it – see our case study.

Informing the local authority

Regardless of the situation in which the lodger becomes resident it is the liable person who has the responsibility to ensure that the local authority is kept updated. This includes anything which may increase or decrease eligibility to a discount or exemption.

Failure to keep a local authority updated may result in a fraud investigation if an unknown name comes up during verification checks. If the local authority request information from you then you may additionally incur a penalty of up to £280 per time.

Assistance from LGFA92

Good quality help with your Council Tax dispute can be hard to come across – there’s a lack of independent, expert, places where you can get the help you need however LGFA92 are here to change that. See how we can help today

Contact us today. Email us at, Call our Council Tax helpline on 0191 6451118.

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.



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