You have just bought your first house or apartment, and ready to move into your new home, but when do you have to start paying Council Tax? And what are the pitfalls and things you should look out for?
Council Tax is mandatory for all properties in the UK, even when it is unoccupied. The rules can sometimes be complex, but when you own a property the responsibility falls on you as the homeowner. Here we’ve compiled a list of common questions that First Time Buyers ask about Council Tax, and when they need to start paying Council Tax after buying a house or apartment.
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Do I start paying Council Tax on Exchange or Completion?
As the property only legally belongs to you from Completion Day, you only have to start paying Council Tax from the date of Completion, not from the date of Exchange. The seller is still responsible for paying Council Tax until the date of Completion.
You can inform your local council about your Completion date by registering for Council Tax via their website. You don’t have to do this on Completion Day, but try to register for Council Tax within 2 weeks of Completion. This is one thing many First Time Buyers often forget to do, as moving in to a new property can be quite a hectic and stressful time.
To find out which council your property is in, use this tool to search by postcode.
Until when do I need to keep paying Council Tax for my previous rental property?
As a First Time Buyer, you are most likely renting your current property. You are responsible for paying Council Tax until the last day of your rental agreement. If there is an overlap between your rental and your home ownership, then you will have to pay Council Tax for both properties during the overlap.
There are discounts that you can apply for during the overlap period. There is the Second Home discount, the Empty Property Discount (only in some councils), or potentially the 25% Single Person discount (only in some councils).
If you are buying a property that is not fit to live in (i.e. a derelict property) then you could also get a discount or exemption on Council Tax, but this is extremely rare scenario for First Time Buyers. Check with your local council if they have a derelict property discount, and what criteria applies to it. This could apply if you’re buying a property that needs a substantial renovation or building works done to become habitable (see next question).
Do I pay Council Tax when renovating or refurbishing a property?
It used to be that you could get a Council Tax exemption for an empty property or a property undergoing refurbishment. However, most councils nowadays do not give any discounts or free Council Tax for refurbishments or renovations anymore. Exceptions apply for a property that is derelict, but the rules are pretty strict. Look at your council website as the rules will differ from council to council.
If you are living somewhere else while undertaking renovation works, you could try claiming a Second Home Discount on your Council Tax or an Empty Property Council Tax discount, if your council provides one.
Alternatively, if you are buying jointly with someone else, like your spouse, you can choose to register only one of you at your new property, thereby getting the 25% single occupancy council tax discount (in some councils).
Every council will have its list of exemptions available for Council Tax, and it can vary from council to council. Wandsworth Council for example has over 15 exemptions available, as well as a list of over ten categories of occupiers that are exempt or eligible for a Council Tax discount.
Am I liable for Council Tax for the previous owner?
You might be worried that you could be liable for the previous owner’s Council Tax, if they have not paid up and fallen into arrears. However, rest assured that the local council cannot come after you, the new home owner, for council tax arrears or council tax debt that the seller or previous owner of the property has racked up.
When you register for Council Tax, you will get a confirmation from the council of the date you are starting to pay your council tax from. If the previous owner has a debt or arrears, they might send a letter through the post to your property, addressed to the previous owner. Please either make sure it is passed to the previous owner, or Return it to Sender (i.e. the council) so they know that the previous owner has moved away.
When do I need to start paying Council Tax on a new build property?
You only start paying Council Tax on a newly built apartment or house from Completion Day. You do not have to pay council tax from before this date.
However, the process depends on the builder informing the local council about when the property was completed, the value of the property, and so on. The council will then have to work with the Valuation Office Agency to establish which council tax band your new build property falls under.
Therefore it might take some time before the council is ready to process your Council Tax application.
Is there a council tax discount on Shared Ownership properties?
Unfortunately, Shared Ownership properties are treated the same as any other private residence – you have to pay the same amount of Council Tax on them. There is no Shared Ownership discount on Council Tax. The same rules applies to Shared Ownership as any other residential property.
If you’re reading this article while still at the beginning or middle of the house buying process, well done for being prepared and planning ahead to your move in day! Don’t forget to budget for Council Tax into your spreadsheet of homeowner costs. Council Tax can wary a lot from council to council, and from property band to property band.