Domestic property is defined as property used wholly for the purposes of living accommodation and includes the property itself and gardens, outhouses, storage premises and garages if they are used for domestic purposes. It also includes almshouses, accommodation for the elderly or mentally ill and accommodation for charity staff. It does not include short stay or self-catering accommodation or time-shares.

People who live in domestic properties must pay council tax unless they are eligible for some form of rebate. There is no longer a specific relief for charities.

The key is therefore to consider:

• who is liable for the tax (sometimes it might be the charity) and
• who lives in the property and what reliefs are available to them.

The tax will usually be paid by the resident of the property. If there is no resident, then the owner will be liable. This can happen if a charity has been left a property under a will, or simply where a charity owns rental properties as an investment or for the purposes set out above and these are temporarily empty.

There are other situations where the charity would be liable for the tax:

• where the property is a residential care home, a nursing home or a hotel; see below re exemptions
• a dwelling inhabited by a religious community whose principal occupation consists of prayer, contemplation, education, the relief of suffering or a combination of those activities
• a property occupied by a minister of religion from which he or she performs his or her duties and
• a property occupied by employees for the purpose of their employment.

Certain people qualify for exemptions, including those who are in detention, the severely mentally impaired, persons for whom child benefit is payable, students, student nurses, apprentices or youth training trainees, people living in hostels or night shelters and patients in nursing homes or other forms of residential care.

Where a person’s sole residence is a hospital (whether operated by the NHS or, military, air force or naval unit) or an establishment providing medical treatment that person will also be exempt. Certain staff will also be exempt, including those living in care homes provided that they carry out 35 hours per week of care.

Properties occupied entirely by students will be exempt from council tax. Properties occupied entirely by other exempt people will still be liable for council tax, but subject to a 50% discount. Such exemptions do not apply to the partners or spouses of such exempt people unless they qualify in their own right.

Therefore, if a non-qualifying spouse or partner lives on the premises with the qualifying person liability for council tax will arise. It may still be possible to claim a discount of 25% on the council tax bill.

There is also a provision for charitable residential properties and properties owned by a disabled person which have been substantially adapted for special needs to transfer down one band below the normal band for that property.