A fund of £4m will be set up by the government for local authorities to cover the cost of the unpaid council tax.
Around 6,500 homes across Britain had suffered flooding following heavy and persistent rainfall and storms since December.
Earlier, Mr. Cameron has reassured those affected that “money is no object” when it comes to the clean-up operation.
The prime minister has urged insurers to deal with flood claims at the earliest possible.
Somerset County Council has already announced plans to suspend its part of the tax for residents affected by the flooding, and Aylesbury Vale District Council in south Buckinghamshire have said households can apply for a 100% reduction in the fee.
Mr. Cameron has confirmed that the councils who will adopt such measures to support flood victims would be compensated.
He has tweeted: “I can confirm we will fund councils that give council tax rebates to people whose homes have been flooded.”
In this crisis situation, Labour party has also insisted in an attempt to solidify their political ground that ministers should tell councils not to force flood-hit families to pay their council tax.
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