Council Tax Class 23 Exemption Scotland

A Class 23 exemption is the most valuable council tax relief in Scotland — it reduces the bill to zero. But it applies only in specific household configurations, and families often miss it or confuse it with the standard SMI discount.

What Class 23 Means

Under Schedule 1 to the Council Tax (Exempt Dwellings) (Scotland) Order 1997, a dwelling is 100% exempt from council tax when it is occupied exclusively by one or more persons who are disregarded on the grounds of severe mental impairment.

In practical terms, this means every adult living in the property must qualify for the SMI disregard. The bill drops to zero — no council tax, no water and sewerage charges collected on behalf of Scottish Water.

When Class 23 Applies

A person with SMI lives alone. If the only adult resident qualifies for the SMI disregard, there are zero counted adults. The property is occupied solely by an SMI person, so Class 23 applies. Children under 18 do not count — a parent with SMI living alone with their children still gets the full exemption.

All adult residents have SMI. If a couple both qualify for the SMI disregard — for example, both have advanced dementia — the property is occupied exclusively by SMI individuals. Class 23 applies and the bill is zero.

When Class 23 Does Not Apply

An SMI person lives with a chargeable adult. If one resident has SMI and the other is a chargeable adult, the property is not occupied solely by SMI individuals. Class 23 does not apply. The other adult is the only counted adult, triggering a 25% single-person discount.

An SMI person lives with a qualifying live-in carer. Even though both people are disregarded (the SMI person under the SMI disregard, the carer under the carer disregard), the property is not occupied exclusively by SMI individuals — the carer is disregarded on different grounds. Section 79(2)(b) of the LGFA 1992 applies a 50% discount instead of a full exemption.

An SMI person lives with two or more non-disregarded adults. Two or more counted adults remain, so no discount from the disregard is available (though other reliefs like Council Tax Reduction may apply to the remaining bill).

Class 23 vs the 50% Discount

The distinction between a 100% exemption and a 50% discount catches families out. Here is the key difference:

The practical takeaway: Class 23 requires every adult in the property to be disregarded specifically under the SMI provision. If another adult is disregarded for a different reason (such as a carer or student), the property gets a discount instead. Under-18 children do not prevent Class 23.

Water and Sewerage Charges

Under a Class 23 exemption, both the council tax and the water and sewerage charges collected on behalf of Scottish Water are completely removed. This is unique to the full exemption — the 25% and 50% discounts reduce the council tax element but handle water charges separately under the Water Charges Reduction Scheme.

How to Claim

The application route is the same as any SMI disregard claim — you submit the application form, medical certificate, and benefit evidence to your local council's revenue department. If the council confirms that every adult resident qualifies for the SMI disregard, they will apply Class 23 automatically.

If the household configuration changes — say a non-SMI person moves in — the Class 23 exemption ends and the council recalculates based on the new headcount.

Our Scotland SMI and Disability Council Tax Guide covers every household scenario in detail, with worked financial examples showing the exact savings for each configuration across Scotland's council tax bands.

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