Council Tax: A Complete Guide | Simon Blyth Estate Agents

May 29, 2024

Nobody enjoys paying taxes, but Council Tax is an important way to uplift local communities.

Most adult residents in England, Scotland and Wales pay council tax on their homes — whether they rent or own the property. Council tax is paid directly to local councils, and funds essential public services such as social care, roads, schools, libraries and refuse collection.

Read on to discover how Council Tax works, what it funds, how it is calculated, and how you can manage your council tax payment.

What Is Council Tax?

Council Tax is a tax on domestic property collected by local councils.

Different properties command different rates of Council Tax, known as Council Tax Bands, and some properties and residents may be eligible for a discounted rate, or even no rate at all.

Two adults living in a home usually pay their full Council Tax band rate, though there are some exemptions, for example for people in full-time education, certain apprenticeship schemes, and live-in carers.

Additionally, people on a low income or in receipt of benefits may be able to get a Council Tax Reduction.

If everyone living in the home is exempt, you get 50% off your Council Tax bill, and if only one adult in the home is eligible, you get 25% off your Council Tax bill.

How Does Council Tax Work?

Council tax is determined based on property value, as well as other factors, such as size, layout, character, and location.

You need to ask three questions to understand how much Council Tax you will pay:

What Council Tax band applies to the property?
How much does your local council charge for that band?
Can you get a discount, exemption or reduction from the full bill?

You will receive an annual Council Tax bill from your local council, that tells you how much you have to pay for the year, and when you have to pay.

Council Tax is usually paid over ten months. In most councils, you can pay your Council Tax online, or with cash at post offices, banks, newsagents and convenience stores.

How Is Council Tax Band Calculated?

As Council Tax was first introduced in 1991, rates are based on the value of properties (that aren’t used for business purposes) on 1 April 1991 (2003 for Wales).

Houses built or converted after this time are assessed by the Valuation Office Agency (VOA) to determine the price the property would have sold for on the open market on 1 April 1991.

The VOA also takes into account factors such as property location, as well as the size, layout, and character of the property to calculate its Council Tax Band.

If you believe that your property is in the wrong Council Tax band, or you have made significant changes to the property, you can request a Council Tax appeal or band review.

Understanding Council Tax Bands

In England, there are eight bands of Council Tax, with the lowest-valued properties on band A and the highest-valued properties on band H. In Wales, this is spread over nine bands, A-I.

Property value up to £40,000 at 1 April 1991
Property value between £40,001 and £52,000 at 1 April 1991
Property value between £52,001 and £68,000 at 1 April 1991
Property value between £68,001 and £88,000 at 1 April 1991
Property value between £88,001 and £120,000 at 1 April 1991
Property value between £120,001 and £160,000 at 1 April 1991
Property value between £160,001 and £320,000 at 1 April 1991
Property value of more than £320,000 at 1 April 1991

How much Council Tax you pay for each band differs between councils, so your exact rate will depend on where in the country you live.

You can check the rate for your property address on the gov.uk website, or find local Council Tax charges for the areas Simon Blyth covers:

How to Manage Your Council Tax

Setting up a direct debit can make it easier to manage your Council Tax payments.

You can also explore what discounts might be available to you through your local council. Council Tax exemptions apply to:

Under 18s
People on some apprenticeships
18- and 19-year-olds in full-time education
Full-time students at college or university
People under 25 years old in receipt of funding from the Education and Skills Funding Agency
Student nurses
Foreign language assistants registered with the British Council
Severely mentally impaired adults
Live-in carers caring for someone who is not their partner, spouse, or child under 18
Diplomats

You can request an appeal or band review of your property if you believe that it is in the wrong Council Tax band. Be prepared to present evidence to support your appeal.

Council Tax bands may change if:

Part of the property is demolished or expanded
The property changes from a single unit to multiple units (or vice versa) —for example, if a house is converted to flats.
The occupier starts or stops working from home
A previous owner made significant changes to the property
The local area changes substantially
A similar property in the local area has its Council Tax band changed

Finally, you may discover an error in your council tax bill, for example, if the bill was sent to the wrong person, the amount charged is incorrect, a reduction or discount hasn’t been applied, or if your home should not be charged Council Tax at all. You can write to your local council to appeal Council Tax billing errors.

Conclusion

While we might not enjoy paying council tax, it’s just part of having your own place. Council Tax keeps essential local amenities such as social care and schools, libraries and museums, roads and public transport, refuse collection, and emergency services running smoothly.

Your council tax is based on the 1991 value of the property (ie. which Council Tax band it is in), the rate your local council charges for Council Tax, and any discounts or exemptions you may be entitled to receive. Reach out to their local council for specific questions about your council tax, and contact your estate agent with any other property-related questions.