Council Tax Material Interest Contractual Periodic Tenancy


A problem for landlords is when a tenant fails to give proper notice or abandons, and the landlord becomes liable for council tax whilst the property is re-let. 

When a property is unoccupied and unfurnished, the person liable for council tax is the person who has the material interest. That includes whoever has a tenancy, but only if that tenancy was granted for six months or more. If the tenancy is for less than six months, the liability will pass to the freeholder owner in most cases.

In Genevieve Macattram v London Borough of Camden [2012] EWHC (Admin,) 1033 [2012] RA 369, it was held that after a contractual tenancy has ended (not an assured shorthold tenancy) and the payment of rent is made and accepted, a new periodic tenancy is granted between landlord and tenant based on the terms of the earlier fixed term tenancy. 

This tenancy is a brand new tenancy and not a continuation. As a result, the tenant has no material interest as this new tenancy was not granted for at least six months. 

In CT v Horsham District Council (HB) [2013] UKUT 617 (AAC), it was held that where an assured shorthold tenancy becomes statutory periodic after an initial fixed term (of whatever length), that new statutory periodic tenancy will not be a tenancy of six months or more and will only be a new tenancy of the period of the tenancy (e.g. one month where the rent is monthly). This case only relates to a statutory periodic tenancy.

If the tenancy is like ours and does not actually end but continues as a contractual periodic tenancy, we and others have submitted that CT v Horsham DC would not apply because the tenancy does not end. Therefore, the tenancy in its continued form was granted for six months or more. If that is right, the tenant will remain liable for council tax whilst the tenancy exists without occupation.

Valuation Tribunal - Contractual Periodic Tenancy Case

In the case between Trustees of the Berwick Settlement and Shropshire Council, appeal number 3245M131738/176C, the Valuation Tribunal has agreed. 

A tenancy was granted from 23 July 2010 to 22 July 2011. 

After the initial twelve-month term expires, the tenancy contracted to continue from month to month. The tenants gave the notice to leave on 22 July 2013 but went on 26 June 2013. 

The landlord was billed for 26 June 2013 (when the tenant left) until the property was re-let sometime in August. 

The landlord appealed about the period between the tenant vacating and the tenancy ending (26 June to 22 July 2013). 

The landlord argued that as the tenancy continued upon expiry of the initial term and did not end, the tenant continued to have a material interest during this period because a tenancy was granted for a fixed term of six months or more. 

The billing authority argued that the tenancy agreement had an initial fixed term, and after the expiry of the fixed term, it continued on a month-to-month basis. 

As a result, during the period in dispute, the tenants no longer possessed a material interest in the appeal dwelling because they were monthly periodic tenants only. 

In paragraph 22, the tribunal said:

The key difference between this case and Macattram is that in this case the tenants had been granted a leasehold interest for a term of six months or more and the contractual term of that lease had not ended, being extended from month to month as part of the term. The fact that they no longer held under the initial term is not, in the judgment of the Panel, a relevant consideration: the leasehold interest “was granted” (applying the words of section 6(6) of the 1992 Act) on 23 July 2010 for a term of six months or more and they continued to hold the appeal dwelling under the extended contractual term until it was agreed their notice expired. They continued to have that material interest in the whole of the dwelling. In Macattram there was no contractual provision for the original term to continue: a new tenancy had arisen by the demand and acceptance of rent.


This is only the first stage of an appeal but does agree with what we have thought for some time that our tenancy agreements which do not go statutory periodic (mainly to avoid Superstrike problems), should ensure that the tenants remain liable for council tax even if they don’t occupy until the tenancy is ended correctly either by valid notice or some other way.

View Related Handbook Page

Council Tax

In self-contained flats or houses, the tenant usually is liable for Council Tax. Landlords should inform the Council Tax section of the local authority in writing whenever someone moves in or out of their property or if it is empty.