Lodgers & Council Tax

Will taking in a lodger affect your council tax?

Even though Council tax is a system based on charging per property and not per person, there is a possibility your council tax rate will change by taking in a lodger.

If you currently qualify and benefit from the single person’s 25% council tax discount, a lodger will make you no longer eligible from claiming the discount, unless your lodger falls into one of the following categories:

  • Receives benefits and is exempt from council tax
  • In full-time education
  • Paying council tax somewhere else (this often applies to Monday to Friday lodgers)

In any case, if you are currently living alone and you take in a lodger, you will need to inform your council tax office (even if your lodger fall into one of the above categories).

If you’re unsure if taking in a lodger will affect your council tax rate, it is best to contact your local authority.

If your rate is affected…

In many cases, it is single people that get lodgers, so many landlord lodgers lose their single person discount. However, generally speaking, the extra amount landlords can make from the rental income makes it a worthwhile trade. Of course, you can adjust the amount you ask for rent to cover the increase in council tax- so this is something that’s worth investigating before finding a lodger. It’s also worth bearing in mind that landlord lodgers are entitled to earn up to £7,500 tax free under the Lodger Rent a room scheme– so that alone can compensate for the loss in the council tax discount.