Whether you’re buying or renting, council tax is just one of those inevitable payments you’ll need to consider.
There is one bill per home in the UK, and each home has been placed into one of eight bands by the Listing Officer of the Valuation Office Agency. But what is council tax, and how does it affect the cost of a property?
What is council tax?
Council tax is levied on residential properties to help fund local government services. It is collected by local authorities, such as city or borough councils, and used to finance various services provided to residents, including:
- Local schools
- Police services
- Fire and rescue services
- Waste collection and disposal
- Street cleaning and maintenance
- Parks and recreational facilities
- Housing services
How much council tax will I pay?
The amount of council tax a household pays is determined by the local council and is based on the value of the property, as well as the council tax band it falls into.
Properties are assigned to one of eight bands (A to H in England and similar bands in Scotland, Wales, and Northern Ireland) based on their estimated market value as of April 1, 1991. The higher the band, the more council tax you will pay.
Related: Your guide to understanding your property’s value
Having this set date ensures that every property is treated in the same way, even those that were not built at the time. Basing council tax on what a property would have sold for on April 1st, 1991, means that any fluctuations in the housing market will not affect a council tax band unless there is a council tax revaluation.
Council tax bands
Properties in the UK are placed under one of eight bands (A-H), depending on the price they would have sold for in April 1991.
The council tax band ranges for England are as follows:
|
Council tax band |
Ranges of value |
|
A |
Up to £40,000 |
|
B |
£40,000 – £52,000 |
|
C |
£52,000 – £68,000 |
|
D |
£68,000 – £88,000 |
|
E |
£88,000 – £120,000 |
|
F |
£120,000 – £160,000 |
|
G |
£160,000 – £320,000 |
|
H |
More than £320,000 |
Paying the council tax bill
Council tax is typically paid in monthly or annual instalments and is a significant source of revenue for local authorities, allowing them to provide essential services to the community.
Failure to pay council tax can result in legal action, including fines and property seizure in extreme cases. It is a mandatory tax for all residential properties in the UK, with few exemptions or discounts available for certain individuals, such as students and single occupants.
How is a new property given a council tax band?
For newly-built properties, the Valuation Office Agency for England and Wales (VOA) will automatically assess it in order to place it in the correct council tax band.
These assessments are based on:
- Size
- Layout
- Location
- Character
- Value on a certain date
- Change in use (if applicable)
If a property did not exist in 1991, it will be compared to similar properties in the same location.
Whether you’re buying, selling, renting, or letting, contact Martin & Co for expert advice and guidance
