There is a trap in it, though. The council tax definition of a house in multiple occupation is not the licensing definition, and the two tests pull in different directions.

A flat share can need an HMO licence and still not be an HMO for council tax. This page sets out both tests, and are tenants or landlords liable for council tax in Scotland covers the ordinary tenancy.

The shape of the agreements, not the number of people. Class 3 covers a dwelling occupied by people who do not form a single household, where each occupier is a tenant or licensee of part only of the dwelling, or has a licence but is not liable for rent on the dwelling as a whole.

Two things are being tested

First, whether the people living there form a single household. Second, and this is what decides most cases, what each person’s agreement actually covers.

An agreement for a room is an agreement for part only of the dwelling. An agreement for the whole flat, signed by everybody, is not.

Where the power to do this comes from

Section 76(1) of the Local Government Finance Act 1992 lets regulations make the owner liable in place of the section 75 hierarchy. Class 3 of the Schedule to SI 1992/1331, as substituted by SSI 2003/137, is that provision for shared housing.

The effect is total, not partial

Where class 3 applies the hierarchy is displaced entirely and residents have no council tax liability at all. They are not last in the queue, and what the council tax hierarchy of liability is sets out the ladder that has been replaced.

Because the two definitions test different things. Licensing under section 125 of the Housing (Scotland) Act 2006 turns on three or more unrelated occupiers, while council tax turns on whether each tenancy or licence covers part only of the dwelling.

The two tests side by side

The case that catches people

Four friends sign one joint tenancy over a whole flat. The property is licensable as an HMO, because there are three or more unrelated occupiers.

For council tax it is not an HMO, because nobody holds a tenancy of part only. The four tenants are jointly and severally liable and the council will bill them.

And the case that goes the other way

Three people each sign a separate agreement for their own room in the same house. Class 3 applies, so the owner is the liable person even though the residents are the ones living there.

The resident tenants, jointly and severally. Section 75(3) makes two or more people who fall within the same paragraph of the hierarchy on the same day each liable for the whole of the council tax on that dwelling and that day.

Joint and several means the whole amount

There is no half-share and no third-share as against the council. It can pursue any one of the joint tenants for the full bill and leave them to sort the rest out between themselves.

Regulation 18(2) of the Council Tax (Administration and Enforcement) (Scotland) Regulations 1992 goes further. A person jointly and severally liable with the addressee is liable to make the payments the notice requires even if they never received it.

Who is liable in each arrangement

One notice, one dwelling, one year

Regulation 19(1) of the 1992 Regulations makes a notice relate to a particular dwelling and a particular financial year only. So a shared flat generates a separate demand for each year, and the people liable can differ from one year to the next.

That is worth knowing before you agree to pay something off. Ask which financial year a balance relates to before you send money towards it.

The date somebody moved in or out still matters

Liability is fixed day by day under section 75(1), so a flatmate who left in October is liable for the days up to then and no further. Can you be chased for a former partner’s council tax works that through.

Write to the council, say that class 3 applies, and set out what your agreement covers. The argument is about the shape of the tenancy rather than about whether you can afford the bill.

What to send

• A copy of your own tenancy agreement or licence, with the part describing what you are renting.
• Confirmation that the other occupiers hold separate agreements, and copies if you can get them.
• The dates you have lived there, and the address the bill relates to.
• The owner’s name and address, so the council can bill the right person.

Where an unresolved dispute goes

Liability is for the council in the first instance, with an onward appeal to the Local Taxation Chamber of the First-tier Tribunal for Scotland, which took over on 1 April 2023. Liability appeals run to 4 months.

Keep paying while you argue, if you can

A liability dispute does not pause recovery, and the council tax recovery sequence moves quickly. What happens if you do not pay your council tax in Scotland sets out the steps.

The council pursues the owner, because the owner is the liable person. Where there is more than one owner, section 76(4) makes them jointly and severally liable.

It does not come back to the residents

Class 3 does not put residents at the back of a queue. It takes them out of liability, so an owner’s failure to pay is a matter between the owner and the council.

What you pay your landlord is a separate question

What your rent covers is a matter for your lease rather than for council tax law. If your agreement says the rent includes council tax, that is a contractual term between you and the owner.

If sheriff officers contact you at the address

Reply in writing saying you are not the liable person and giving the reason. What to do if sheriff officers knock on your door covers the practical side, and nothing inside a dwellinghouse can be attached without an exceptional attachment order in any event.

They attach to the liable person. Where the owner is liable under class 3, the residents’ own circumstances do not put a bill in their name and do not produce a discount on one.

Where the tenants are liable, the discounts do apply

A full-time course means one lasting at least 24 weeks in the academic year and normally requiring an average of at least 21 hours a week. Do students have to pay council tax in Scotland sets out both student routes.

The single person discount in a flat share

A 25% discount applies where all but one of the residents are disregarded, whatever the ground. Which people are disregarded for council tax purposes covers the categories, and how the single person discount works in Scotland covers the simple case.

Council Tax Reduction is a different scheme with its own rules

It is claimed by the liable person, and the working-age Council Tax Reduction (Scotland) Regulations 2021 use their own definition of a student that does not match the 2003 discounts order. What Council Tax Reduction in Scotland is explains the scheme.

Whether your agreement covers the whole property or only part of it. That single fact decides whether the bill is yours.

The three questions to answer

• Does the agreement name the whole flat or house, or only a room?
• Are you liable for the rent on the whole property, or only for your share?
• Did everybody sign the same document, or did each person sign their own?

Then check who is on the council’s record

Ask the council in writing who it has recorded as the liable person for the address and for which periods. Our page on council tax billing and collection explains how a demand notice is built.

And deal with any arrears while you sort the principle

Our council tax debt advice page sets out how we help, and what makes you liable to pay council tax in Scotland is the wider guide.