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How is council tax calculated?

You pay council tax every year and it’s an unavoidable cost for most tenants and homeowners. Many see their monthly bill from the council and don't think about why they're paying what they are.

A row of coins on a council tax bill

At face value these council tax bands can be quite confusing. But it's not as perplexing as you might think. We're here to answer all of your questions from how much is council tax and how it’s calculated to what band your property is in. We’ll also cover how you could get a discount.  

What is council tax? 

Council tax is a tax enforced by local authorities, and applies to all homeowners and renters.

It’s a charge most people have to pay on a monthly basis. It’s different to other household costs, such as home insurance or energy bills, as with those you choose who provides the service and how much you pay. 

Councils split this tax into bands, which are based on the value of your property at specific times.

If you rent a property, the tenants are usually responsible for paying the council tax.

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What is council tax used to pay for? 

When you pay council tax, this money is used to benefit local services and amenities.

At a basic level you can expect your council tax to go towards:

  • Police forces

  • Fire and rescue services

  • Transport services

  • Recycling and bin collection

  • Improving parks and public spaces

  • Extra support for elderly and vulnerable people.

The basic idea is that the tax you pay goes back into supporting your local community, you can find a full list of where it goes on GOV.UK

How is council tax calculated? 

Council tax splits into bands, much like you see with Vehicle Excise Duty, or 'car tax'.

For properties in England, council tax bands use the property’s value on 1 April 1991:

COUNCIL TAX BAND (ENGLAND) VALUATION
A
Up to £40,000
B
£40,001 - £52,000
C
£52,001 - £68,000
D
£68,001 - £88,000
E
£88,001 - £120,000
F
£120,001 - £160,000
G
£160,001 - £320,000
H
£320,001 +

For properties in Wales, councils base their tax bands on the property’s value on 1 April 2003:

COUNCIL TAX BAND (WALES) VALUATION
A
Up to £44,000
B
£44,001 - £65,000
C
£65,001 - £91,000
D
£91,001 - £123,000
E
£123,001 - £162,000
F
£162,001 - £223,000
G
£223,001 - £324,000
H
£324,001 - £424,000
I
£424,000 +

These are the council tax bands for Scotland, based on the value your property on 1 April 1991:

COUNCIL TAX BAND (SCOTLAND) VALUATION
A
Up to £27,000
B
£27,001 - £35,000
C
£35,001 - £45,000
D
£45,001 - £58,000
E
£58,001 - £80,000
F
£80,001 - £106,000
G
£106,001 - £212,000
H
£212,001 +

 

The amount you pay for each band depends on your local authority. You can find out how much your local authority charges for council tax on GOV.UK.

How is council tax calculated in Northern Ireland?

Councils in Northern Ireland call council tax ‘domestic rates’. These use the estimated value of your property on 1 January 2005, known as the capital value.

Domestic rates multiply your home’s capital value by a ‘domestic rate poundage’. These vary between local authorities (rates correct as of 05 July 2019).

LOCAL AUTHORITY DOMESTIC RATE POUNDAGE
Antrim and Newtownabbey
0.008152
Ards and North Down
0.007836
Armagh City, Banbridge and Craigavon
0.008886
Belfast City
0.007901
Causeway Coast and Glens
0.0008195
Derry City and Strasbane
0.009419
Fermanagh and Omagh
0.008142
Lisburn and Castlereagh
0.007611
Mid and East Antrim
0.00887
Mid Ulster
0.007841
Newry, Mourne and Down
0.008467

So if you buy a house in Belfast and its capital value is £150,000, your annual domestic rates would be £1185.15 (0.007901x £150,000).

What band is my council tax? 

You can check the council tax band of any property in England and Wales via GOV.UK. Just enter the postcode, and you’ll be shown the council tax band. You can also call the Valuation Office Agency (VOA) on 03000 501 501 if it’s in England. If your property is in Wales call 03000 505 505.

If the property is in Scotland you’ll need to check on the Scottish Assessors website.

This is also a good way of checking you’re paying the correct council tax for your home. You can use it to challenge a decision if you think you’re paying for the wrong council tax band. 

How can I reduce my council tax payment? 

Under certain circumstances you could be eligible for a discount on your council tax:

  • 25% off if you’re the only adult living on the property. See GOV.UK for info on who’s considered an adult for the purposes of council tax.
  • 100% discount if everyone in the house (including you) is a full-time student.

There are discounts available for:

  • certain disabilities
  • carers
  • modified homes for disabilities.

See GOV.UK for the full list of criteria.

Second homes and empty properties are sometimes eligible for a discount. This is at the discretion of each local authority, so it’s best to check with them.

Northern Ireland uses a different scheme for reductions in domestic rates.

Who is exempt from council tax?

Not everyone has to pay council tax, as some properties are exempt from it. This might be permanently, or for a short period.

There may be an exemption in the following circumstances:

  • If the property is condemned or re-possessed by a mortgage provider
  • Unoccupied properties if the person living there has moved somewhere else because of their care needs
  • Properties where students or foreign language assistants on the British Council programme live in
  • If all the people living in the home are under 18
  • Property occupied by someone with severe mental impairment.

For a full list see GOV.UK.

What happens if I don’t pay my council tax? 

If you miss your council tax payments, you'll receive two reminders. After that, you’ll receive a final notice where you’ll have to pay the rest of the tax owed for that year.

After that, the council may take legal action against you. This may result in a few different outcomes - you can see the full list on GOV.UK.

Can I lower my council tax band?

If you think your council tax band is too high for where you live, you can apply to get your property re-evaluated.

A word of caution: You can’t request to get your council tax band lowered – only reassessed. This means that your council tax band could go up as well as down.

To challenge your council band, you’ll need evidence to show that you’re in the wrong banding.

Check out house valuation websites such as Zoopla to find out the value of similar houses on your street. You can use the house price calculator from Nationwide to see the likely value when the bands first came in.

If your house is similar in size to your neighbours’ houses but in a higher tax band, you could get it reassessed.

For more information, visit the Valuation Tribunal Service. If you live in Scotland, you can visit the Scottish Assessors Association.

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