Do I pay council tax if I move to a care home?

What is council tax?

Anyone leaving their property to move into a care home may question what house bills they must pay after their move e.g. do I pay council tax if I move to a care home but keep my house – otherwise known as a council tax exemption.

Council tax is a charge that local authorities impose on residential properties in the UK to help pay for local services. Council tax applies to owner occupied and rented homes. 

How much is council tax?

The average Band D council tax set by local authorities in England for 2023-24 is £2,065.

To work out your council tax bill, you must know:   

• The pricing band (category) your home is placed in based on its value.

• How much your local council charges for that band.
• Whether anyone living at the property is eligible for any support, reductions or exemptions from the council tax bill.

Who usually pays council tax?

You usually have to pay Council Tax if you’re 18 or over and living in a property.

Can care home residents get a council tax exemption?

A council tax exemption means the whole property is excluded from council tax and so there is no charge to pay.

If you are wondering what happens to council tax when someone moves into a care home, council tax is not charged if you have moved into a care home long-term and your property is left empty.  

Your property will usually be exempt from Council Tax when it is unoccupied because you have moved into either a residential care home, nursing home, hospital or hostel in which you are receiving care or treatment and it is now your main residence.

However, if someone moves into your property, (e,g, family), while you are living in a care home, they will have to pay council tax on the property.

Who are ‘disregarded’ from paying council tax?

Some individuals are ‘disregarded’ (not included in council tax numbers).

Disregarded individuals include:

• People living long term in care homes, hospitals, certain hostels or night shelters.
• People who have a Severe Mental Impairment (SMI) that appears to be permanent.
• Care workers working for low pay.
• People under the age of 18.
• Full-time students, student nurses, apprentices and youth training trainees.
• People caring for someone with a disability, who is not a partner, or child under 18.
• Members of visiting forces and certain international institutions.
• Members of religious communities (e.g. monks and nuns).
• Prisoners.

The disregarded are, for example, an adult who lives in the property but is recognised as being ‘severely mentally impaired’ (SMI). This could include someone who has Alzheimer’s, Parkinson’s, profound learning difficulties, multiple sclerosis or those who have had a severe stroke.

If a property is only occupied by people who are classed as severely mentally impaired, it is exempt from Council Tax. 

SMI applies to people who meet all the criteria below:

• You have a severe mental impairment (intelligence and social functioning) that seems to be permanent.
• You have a medical certificate confirming SMI from a registered medical practitioner.
• You are eligible for at least one eligible benefit. Common qualifying benefits inlcude:

– Attendance allowance.

–Personal Independence Payment.

Do people with dementia pay council tax?

A person who has a ‘severe mental impairment’ and who receives a qualifying benefit e.g. Attendance Allowance, is exempt from paying council tax. That can include people with dementia.

Council tax discounts 

Apart from council tax exemptions, and ‘disregards’, the local authority could decide to issue a council tax discount to someone living in a property.

A full council tax bill is given if two adults live in a property. You could get 25 per cent discount off your council tax bill if you live alone in the property- this is called a single person’s discount. You may be able to get Council Tax Reduction (used to be called Council Tax Benefit), if you get benefits or you are on a low income.

Can you backdate a council tax exemption?

You can backdate a council tax exemption, ‘disregard’ or discount if it was not applied at the time that it should have been applied. You must prove that the criteria for exemption applied at the time.   

What if my request for a council tax exemption is rejected?

If an application for an exemption, discount or disregard is refused, you can appeal to your local authority. If this is refused, you can further appeal to the Valuation Tribunal in England or Wales. This must be done within two months of receiving the decision.    

Aside from council tax exemption, there are a few benefits you can claim in a care home.