A guide to council tax & property bands

The way we buy and sell homes is forever changing but some things stay the same. The property ‘bands’ that were set more than 30 years ago in 1991 are still used when calculating today’s council tax charges. Expressed as a letter, with A being the least valuable property and H being the most expensive, these bands dictate how much council tax a household should pay.

If you are curious about your property’s band, want to know if it can be changed or whether the bands will alter in the future, read on for our guide to council tax and property bands.

Today’s bands
Let’s start with a little background. Each local authority is free to set their own council tax but they do, in fact, all work to the same set of property bands, as follows:-

A: up to £40,000
B: £40,001 to £52,000
C: £52,001 to £68,000
D: £68,001 to £88,000
E: £88,001 to £120,000
F: £120,001 to £160,000
G: £160,001 to £320,000
H: more than £320,000

When you move into a property, whether owned or rented, it usually falls to the occupant to pay the council tax bill. The money collected by the local authority pays for vital services, such as refuse and rubbish collection, street lighting, emergency services and community assets, such as libraries.

You could be in the wrong band
The job of valuing properties before the council tax’s launch in 1991 was very rushed. In some cases, those responsible for providing the figures simply drove past rows of houses, assigning each property the same band without detailed examination.

The financial commentator, Martin Lewis, estimates that thousands of homes were incorrectly banded and it is possible for occupiers to challenge the band they were given. This process is managed by the Government’s Valuation Office Agency and it can present a successful way of re-banding your property and reducing your council tax bill.

If you are thinking of asking for a band reassessment, be aware of the pitfalls. Quite simply, the Valuation Office Agency may think you aren’t paying enough council tax and your new banding may make your council tax bill more expensive. Alternatively, your band may remain the same.

A new garden room may have an impact
If the recent ‘race for space’ and a greater appreciation of your garden prompted you to add an annexe or a fully habitable outdoor room, this may be taken into account when a band is recalculated.

If the Valuation Office Agency deem your outdoor room to have been ‘constructed or adapted for use as separate living accommodation,’ they are obliged to give it its own property band and, therefore, its own annual bill. It’s worth noting that the use of an annexe or garden room is not taken into account. Instead, an assessor will look at its physical features, such as provisions for cooking, sleeping and washing.

The good news is the ‘Granny Annexe Tax’ was abolished in 2014. This spelt the end for two full-price separate council tax bills – one for the main residence and one for the annexe. Now, at the discretion of the local authority, it’s more likely that a 50% reduction in council tax is applied to the annexe.

There’s no plan to reassess every property
With bands that were generated three decades ago – and a property market where values have soared in that time – there has been speculation that the Government would force a mass reassessment of property bands.

As of January 2022, there is no evidence to suggest such a move is scheduled. With an estimated 23 million domestic dwellings in England, any plan to revalue and re-band properties would take years in the planning and would require huge resources. For now, the current bands look set to stay, unless challenged by the property owner.

If you would like more detailed information on property bands and whether you qualify for a council tax discount, visit the Government’s dedicated webpage. If you would like to know the band and council tax bill for a property we are marketing, please get in touch.