If your home is in the wrong council tax band you could be paying too much and may even be eligible for a refund. But that’s not the only reason you could be owed money back. Here is what you need to know.
Council tax bills are on the rise so it’s important to check that you’re not paying more than you should be. Find out how in our guide.
Council tax is a tax on households levied by local councils, with the money collected used to pay for local services such as street cleaners, police, public libraries and schools.
Any property that could be considered a 'dwelling' is liable for council tax - from houses to houseboats (though in the case of mobile homes and boats, this is only true if they are a 'primary residence').
The amount of council tax you pay compared with other local residents is dependent on the value of your home and who lives there. Every home is put into one of eight council tax 'bands' running from A to H, with bills reflecting the banding.
The band determines the base bill for each home, but there are a series of discounts to this available depending on who lives in the home and their circumstances.
In the years since council tax was introduced, average bills have more than doubled.
Council tax bills also vary widely from region to region since each council sets its own level of council tax.
Most homes in England and Scotland were put into council tax bands in 1993, and have not been reassessed since. What's more, the valuations on which these banding decisions were based were actually carried out two years earlier still.
The assessment was also carried out at speed - with every home in the country assigned a value in a short space of time. It’s fair to say mistakes were made.
Official figures suggest that one in 20 homes are in too high a council tax band, while some reports suggest that the figure is far higher - arguing that the original valuations were poorly carried out and wildly inaccurate in some cases.
The most recent statistics show 40,000 people challenged their council’s tax band in 2020-21, and two in five of them saw their band change as a result.
Most of the time, the challenge saw the band lowered or stay the same, but in 20 cases people saw their band increase instead.
The exact figure depends on how much council tax is charged by your council. However, for instance, if your home is currently in band E when it should be in band D, you could be paying over 20% too much.
Do not go rushing to contact the council demanding a refund - it is possible your home could be in too low a band, in which case you would end up paying more.
Instead, it is vital that you do some research to work out whether any claim you make for rebanding or a rebate might be successful. Use our checklist to investigate both your and your neighbours' homes:
Check which Council Tax band your home is in: you can do this quite easily via the GOV.UK website
Check your home's history: your home may have been re-banded (since 1993), e.g. if it was knocked down and rebuilt at any stage or if a past resident successfully challenged their banding
Check the banding of nearby properties: particularly looking at homes that are the same age and size
You can search the GOV.UK website for any address to find out which council tax band it is in; if you find that your neighbours' homes are in lower bands than your own, you may have grounds for an appeal.
It is also worth finding out your home's value in 1991 when the tax bands were first set: if it was in the wrong band originally, it will have stayed there since.
You can use a house price calculator like the one on Nationwide's website to get an estimated value of your house in 1991. To do this you’ll need to enter the property price when it was last valued and then enter ‘1991’ and ‘Q2’ in the final boxes to calculate the value back then.
Once you’ve got a value, you can compare this with the tax bands on the GOV.UK website - but be aware that this will just be an estimate, and may not be the same value used by the VOA.
Even if you find that your home is in a higher band than nearby properties, consider if there is a valid reason for this before you go any further. For example,
Is your home really comparable with your neighbours?
Has it been extended or structurally improved?
Any major work that will have increased your property's value could work against you in an appeal.
However, there might be a clear reason why your home is in the wrong band, compared with your neighbours and this will give you a strong case for appeal.
One example is if part of your property has been demolished or physical changes to the area have affected its value.
In summary, it is important that you get your facts straight before making an appeal.
The key is checking that neighbours in very similar or identical properties are all in a lower band to you AND that your house seems to have been put into a band that is too high.
It is also worth considering the possibility of your home being in the correct band, whilst your neighbour's homes are in lower bands than they should be. If you appeal and this turns out to be the case, your neighbours may end up paying more.
If you think your council tax band is wrong, you can challenge it. How you do this will depend on whether you live in England, Wales or Scotland. Note that Northern Ireland uses a completely different council tax system.
You can submit your challenge to the VOA to have your home's banding reassessed. They will usually review the band if you are challenging it for any of the following reasons:
Your property has changed, for example, if it’s been demolished, split into multiple properties or merged into one
Your property’s use has changed
Your local area has changed, for example, a new supermarket has been built
If you have a different reason, you can still challenge your band. But the VOA will only review it if they think there is enough evidence to support your claim. You can find the full list of required evidence on the gov.uk website.
You will need to search for your property on the Scottish Assessors website and then click on the 'Make a formal challenge' link. You can then fill in an online form which will be sent to your local assessor.
If your challenge is successful you will be eligible for a reduction in council tax and a rebate of any overpayments you have already made.
If you are not happy with the outcome of your challenge, you may be able to appeal to an independent Valuation Tribunal. You must do this within three months of getting the decision.
In Scotland, if the challenge cannot be resolved through discussion, it will be sent to the local Valuation Appeal Committee for a decision.
There is a range of discounts and exemptions available, provided that you fit within a range of household criteria. They include:
If you are the only adult living in your property
If you are a student, living with other students or with only one adult who is in full-time work
If you are disabled or caring for someone who is
If the property is empty
Hardship grants or discounts if you are struggling
To see if you qualify for any of these, head to your council’s website.