Council Tax reform

Your Council Tax helps to fund:

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

Average percentage of council spending on services

Image

'All other services' includes expenditure on a wide range of other services, such as the environment, planning and economic development, libraries and recreation, roads and transport services.

Source: Local government budgeted revenue expenditure in 2023 to 2024 (StatsWales).

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

The Council Tax you pay is based on what your property is worth, 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.

The Valuation Office Agency (VOA) value properties for Council Tax purposes. They are the governments' property experts. 

Watch their video which answers common questions on Council Tax. The video also has information on how properties are banded and what you need to do to challenge your band. 

Note, that challenges to Council Tax bands are subject to VOA criteria and won’t always lead to a change in band.

If you are struggling to pay your Council Tax bill please contact your local council, it is important you do so without delay. You can find a range of advice and support on the Advicelink Cymru website, or call the Advicelink Helpline on 0800 702 2020.

Our Phase 1 consultation (July to October 2023) set out our broad aims and programme for making Council Tax fairer. Our Phase 2 consultation (November 2023 to February 2024) proposed 3 approaches to changing the system, and 3 choices for when those changes should be implemented.

What you’ve said

We’ve listened to what you told us through the Phase 2 consultation and have decided to deliver Council Tax reform over the slower timeline proposed, making changes in 2028, as this was the most popular view. 

Plans will be further developed to look at a revaluation of properties and how the tax bands and charges should be reformed. We will consult on further changes in the next Senedd term. 

We are delivering legislation which puts regular revaluation cycles for Council Tax into law, through the Local Government Finance (Wales) Bill that is currently being considered in the Senedd. We will seek to amend the Bill to have more frequent, regular revaluations every 5 years from 2028. This is to ensure valuations are kept up-to-date and you are paying the correct amount of Council Tax.

In the meantime, we are carrying on improving other elements of Council Tax:

• concluding reviews of the arrangements for discounts, disregards, exemptions and premiums, to ensure these are fit-for-purpose and align with policy aims. There are 53 categories to review
• concluding a review of the national Council Tax Reduction Scheme, providing essential financial support for low-income households. We are committed to maintaining the scheme and improving it
• undertake regulatory work to embed best practice in the treatment of households struggling in arrears
• continue to raise awareness of how Council Tax works and what it pays for, addressing common misconceptions and raising awareness of the wide range of support for people. 
• undertake regulatory work to improve the appeals process so that it is more effective and easier to navigate, improving transparency of information

Nearly half of households in Wales currently receive a discount or reduction on their Council Tax bill. It is important we review these arrangements because they have been in place for a long time, to make sure the rules continue to contribute to a fair system.

A review is underway of the 53 categories of discounts, disregarded persons, exemptions and premiums. We will release consultations on specific changes as they are developed.

We have decided to keep the 25% single adult discount. We are committed to improving our Council Tax Reduction Scheme, which provides vital support to around 261,000 low-income households across Wales. We are carrying out a technical consultation on our Council Tax Reduction Scheme in 2024. It is proposing a number of changes to the scheme to make it easier to access and simpler to administer. The consultation closes on the 6 June 2024.

We are continuing to tackle the impact of long-term empty and second homes on local communities. There will be more time for these policies to result in positive effects on housing supply, before we bring in further changes to Council Tax. 

We know from previous research that many people don’t know how the Council Tax system works, what it pays for, how decisions about it are made, and which organisation is responsible for deciding different rules. 

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 future changes to the system, using independent organisations such as the Valuation Office Agency and the Valuation Tribunal for Wales. We will aim to make the process of navigating between these organisations easier and more transparent.