Council Tax reform

We’re looking at different ways of bringing our Council Tax system up to date and making it fairer. This includes the potential to introduce new Council Tax bands.

As part of our phase 2 consultation, we asked for your views on:

• different approaches for new Council Tax bands
• regular updates to Council Tax in the future
• discounts and exemptions
• a more transparent system and a more effective appeals process

Our Phase 2 consultation has now closed. We will publish more details on next steps shortly. Read the summary of responses to our Phase 1 consultation.

Watch our video on Council Tax reform:

Your Council Tax helps to fund:

• schools
• social care
• policing
• local transport services
• hundreds of other essential local services

Council Tax is a general form of taxation where we all contribute to help fund public services. It is not designed to be a direct charge for each service you might use.

The Council Tax you pay now is partly based on what your property was worth 20 years ago. It’s partly based on the home you live in, who else you live with and in some cases, how much money you have.

All domestic properties in Wales are put into 9 bands (bands A to I). The bands are based on how much a home and the land it is on is worth.

A lot has changed since the last time Council Tax was updated in Wales in 2003 and the system is now outdated and unfair. Some people are paying too much Council Tax. Some people may not be paying enough, with households living in lower value properties being charged a relatively higher share of tax.

We have already asked the Valuation Office Agency, an independent body, to prepare for updating Council Tax bands. This update is known as a ‘revaluation’.

The Valuation Office Agency has been looking at the Council Tax bands for all 1.5 million domestic properties in Wales, using the latest technology, recognised by industry experts, and taking evidence from sales. We will use this data to build a system of new bands.

A revaluation would update your Council Tax band so that it is based on more current property values. However, even though house prices have gone up, this doesn’t mean your Council Tax would rise as a result. A revaluation makes sure the money raised overall is based on the most up-to-date information; it isn’t about councils raising extra money.

We are also planning more frequent, regular revaluations every 5 years. This is to ensure valuations are kept up to date and you are paying the correct amount of Council Tax.

As part of this exercise, we are exploring 3 choices for how soon we should introduce these changes, this could be in 2025 at the earliest, at a later date, or in stages.

This consultation provided an update on our review of discounts, disregarded persons, exemptions and premiums, and the Council Tax Reduction Scheme.

Nearly half of households in Wales currently receive a discount or reduction on their Council Tax bill. This will not change as a result of the consultation. We are committed to retaining the one-adult discount, keeping the level of discount at 25%.

We will be carrying out a separate technical consultation on our Council Tax Reduction Scheme in 2024. More details will be published once this is available.

We know from previous research that many people don’t know how the Council Tax system works. We are committed to improving awareness of Council Tax and improving access to information through our wider reform programme.

We will protect people’s rights to appeal as part of any reforms, using independent organisations such as the Valuation Office Agency and the Valuation Tribunal for Wales. We aim to make the process of navigating between these organisations easier and more transparent.