Council Tax — Who Is Liable? The Statutory Hierarchy Explained

The Six-Tier Hierarchy

Section 6(2) of the Local Government Finance Act 1992 sets out a strict ranking. The person who falls into the highest applicable tier is the one the council bills. The tiers, from highest to lowest:

1. Resident freeholder — owns the freehold and lives there
2. Resident leaseholder — holds a lease and lives there (the leasehold interest must not be inferior to another resident's)
3. Resident statutory, secure, or introductory tenant — a council or housing association tenant living in the property
4. Resident licensee — has a contractual licence to occupy
5. Any other resident — an adult aged 18+ whose sole or main residence is in the dwelling
6. Non-resident owner — the owner when there are no resident adults in the property

Most households settle liability quickly. A homeowner living in their own home is tier 1. A private renter is typically tier 4 or 5. The hierarchy becomes important when multiple people have different interests in the same property — say a resident freeholder and a lodger.

Joint and Several Liability

When two or more residents fall into the same tier, Section 6(3) makes them jointly and severally liable. That means the council can pursue either of them for the full amount, not just half each. It is then up to the two residents to sort out who pays what between themselves.

Section 9 extends this: married couples and civil partners living in the same dwelling are jointly and severally liable regardless of which tier each falls into. A wife who owns the freehold (tier 1) and her husband who has no legal interest (tier 5) are both on the hook for the full bill.

The Disregard Protection

There is a critical exception. Under Section 6(4) and Section 9(2), joint and several liability does not apply to anyone disregarded on the grounds of severe mental impairment or full-time student status. A spouse with dementia who qualifies for the SMI disregard cannot be pursued for the council tax bill. The non-disregarded spouse carries the full liability alone — but benefits from a 25% single person discount because only one adult counts.

Non-Resident Owner Liability

When a dwelling has no resident adults, the owner pays. This is tier 6. It commonly applies to empty properties awaiting sale, holiday homes, and buy-to-let properties between tenancies.

Since 1 April 2024, local authorities in England can levy up to a 100% premium on properties left unoccupied and substantially unfurnished for at least one year under Section 11B of the LGFA 1992. For second homes, councils may levy up to a 100% premium from 1 April 2025 under Section 11C, depending on local policy.

Houses in Multiple Occupation

The standard hierarchy flips for HMOs. Under the Council Tax (Liability for Owners) Regulations 1992, if a dwelling is constructed or adapted for occupation by people who do not form a single household — or each occupant holds a tenancy or licence for only part of the dwelling — liability shifts automatically to the owner.

Individual room lettings in a shared house with separate tenancy agreements trigger this. But a lodger living with a resident landlord does not make the property an HMO. The landlord remains liable under the normal hierarchy.

Why the Hierarchy Matters for Discounts

Liability and discount entitlement are separate calculations. The hierarchy decides who the council bills. The discount depends on how many countable adults are resident. A property can have three adults but only one countable resident if the other two are disregarded students — the liable person (whoever ranks highest) gets a 25% discount.

Understanding where you sit in the hierarchy also matters for disputes. If the council is billing the wrong person — say a non-resident former partner instead of the current resident — a Section 16 grievance can correct the record.

The England Single Person Discount guide covers the liability hierarchy in detail, including worked examples for separated couples, HMO tenants, and mixed households with disregarded adults.

See more England guides →